Credit isn’t money. I’m more interested in auto and home insurance and as repair costs went up those went up and never came back down with the fall in energy and other raw materials since last summer. What has to happen now is either an inflationary boom to save the insolvent banks by making their assets solvent or at least postponing their liquidation, or a continuation of what you properly ID’d as deflation with an unseverable hook to financial system insolvency and collapse. IOW, your deflation would be otherwise healthy is currently fatal. Therefore there will be an inflationary boom, you can bank on it or kiss you bank goodbye.
Japan has suffered deflation in most of the last 20 straight years, disinflation in the few others, ever since 1989 when they began Quantitative Easing...printing money 24/7/threesixfive.
They flooded their economy with cash and ZERO% interest rates for the last two decades, non-stop.
And Japan today has 12% deflation.
Japan today has the OPPOSITE of what everyone says that you get when you drop money from helicopters in full volume non-stop every day for 20 years.
Of course, I already told you *why*...and you blew that off...claiming that mortgages couldn’t buy houses...
...well, what you said was that credit didn’t count...that credit wasn’t cash...that credit couldn’t buy anything.
That’s the same as saying that mortgage loans don’t buy houses.
Of course, you aren’t alone. Universities, the news media, and major business organizations say the same thing.
And they all predict inflation or hyper-inflation.
Which is what Japan *doesn’t* have.
And that’s what the U.S. didn’t have back in 1945 when we printed even more money then than today.
So all of these people are mindlessly saying exactly the same thing...saying something that fails to explain the U.S. in 1945...saying something that fails to explain Japan today, last year, last decade, and last 20 years.
To your credit you at least recognize that deflation is the enemy...that deflation could crush the whole system.
Spot on.
Now watch salaries, stocks, and home prices. More to the point, watch shipping, trucking, and air cargo rates (leading indicators for ups and downs in the business cycle).
They’ll let you know in short order if the enemy really is here.
Or not.
Is that your opinion? Or do you have some source that defines what is and isn't money?