“Past performance does not guarantee future results.”
It is very short-sighted to say “commodities are falling today, therefore there won’t be inflation tomorrow.” That is how people lost their ass at the top of the housing bubble. “House prices are soaring today, so they won’t fall tomorrow”. They did.
Please give me a reason based on economic fundamentals and the amount that the government is committing to spend (which will require future printing) why we won’t experience inflation.
Or do you just think that deflation will outpace inflation, regardless how much the government prints?
Thank you.
Inflation is literally an increase in money supply while deflation is a contraction in money supply. Since a lot of money is electronic and never really existed, when it was offered as debt on things like houses and suddenly those houses are worth half what they used to be, the money supply has effectively contracted.
That is deflation. The fed can print TONS of money but at first it will only “backfill” the “virtual” money that people have been loaned. They’re gonna have to figure out a way to loan a LOT of money before they can inflate themselves out of this mess.
Maybe they SHOULD just increase the minimum wage to $70 per hour. That should do it pronto.