Being a "true believer" will bring you truly to ruin.
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Mentatt (at) yahoo (d0t) com
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This Blog is a forum for an ongoing discussion of energy and politics. All political commentary is admittedly Libertarian AND Pacifist in its leanings in the extreme. If you have a particular bias to believe what you read in the Mainstream Media... this is not the Blog for you. If you are willing to question everything... read on!
5 comments:
The deflation isn't going to be in the food and energy. It is going to be in the discretionary stuff: furniture (plasma TVs!), lavish vacations, new cars, clothing, restaurants and hopefully sporting event tickets ;) The inflation will occur in the things where the supply is reduced and the demand (for living) is high. Christmas is gonna suck this year.
You are talking price deflation - that is not really deflation in the economic sense. I was talking monetary inflation, and the result will be price inflation in the commodities and pain in Treasuries
You can flood the economy with all the monetary inflation you want, but if people still have no cash, their credit is tapped, and the banks don't want to lend to anyone, even with dollars aplenty, you can't think businesses are going to raise their prices. GM tried and failed. More than that, we seem to be having a change of national "mood." After 5 years of granite countertops, Home Depot fever and Hummers on credit, people are getting closer to retirement, and now may start saving instead of spending. Businesses cannot survive without some income to pay fixed costs. They will sell for whatever they can get, perhaps even for less than what they bought the stuff for. Deflation. Ugly stuff.
Dear Bureaucrat:
By all means, take the other side of my trade. If you are right, you get to keep my money...
Good Luck!
And if I'm right, we all lose. :( A deflation is like a black hole.
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