Posted on 08/05/2010 11:35:11 PM PDT by onyx
Nope. Not inflation (a devaluation of the Dollar). The opposite: deflation.
Falling salaries. Falling employment (fewer jobs). Falling home prices.
Deflation.
I honestly don’t understand what to do or think.
Japan has had deflation since 1989. 21 straight years of outborrowing and out-spending the U.S.
Why does so much spending not lead to inflation?
Debt.
Debt is deflationary.
Moreover, debt is cummulative.
In contrast, spending is temporary. Yes, spending can give an economy short-term inflation...unless a nation has accumulated so much debt that is dragging the economy down.
Happened to Japan in 1989, and is still going on today.
Happened to the U.S. in 1893 and 1929, too.
We’ve seen all of this before.
It’s not the 1970s (an inflationary period).
It’s the opposite: falling home prices and falling salaries: deflation.
Debt is deflationary.
The Federal Reserve is a Private bank, and Congress abrogated it's responsibilities by establishing the Federal Reserve as a central bank, purveying interest bearing, debt based currency.
This was an act of Treason, and it has been perpetrated by treasonous politicians ever since. Some who have opposed it have been assassinated!
And That's The Truth.
I sure haven’t seen a lot of that (understatement of year). Deflation means a dollar kept as cash will be worth more goods in the future, not less. Au contraire, it is surprising that prices haven’t gone up more than they have with all the funny money that the Bummer and the Ratgress have supposedly stimulused into the economy. The saving grace may be that banks that get their hands on these newly printed, borrowed dollars are socking them away like they’re going out of style, and so they sit in vaults instead of running around the economy driving prices up madly a la Zimbabwe.
Where does one put their dollars at now, especially the money tied up in a 401k, that is expected to finance you through retirement? What investments are safe, that will keep up with the rate of inflation?
We are following Japan’s path since 1989, not Zimbabwe.
So, a dollar buys more house, but it buys less bread. Which type of business occupies the average American more? I don’t think it’s the house!
That’s my thinking and observances too. What to do and what to hold? Dollars? Gold?
All I can say is show me the bundle of goods that is getting cheaper. Houses are a specific bubble that burst. There is no bursting bread bubble.
Exactly. Real estate? Certainly not in a deflationary market. Precious metals? Wicked times.
Your major financial transactions in life are:
1. House
2. Salary
3. Stocks
All are lower now than in 2006 (DOW 14,000!).
Bread and milk prices are trivial. Major personal financials are tracking Japan down.
Fewer jobs. Slower speed of money.
Deflation.
Less credit availability.
Deflation.
If you bought a house, your life probably is dominated by the mortgage. But if you didn’t? Are rents going down? If it weren’t for the cooling effect of cheaper houses and scarcer jobs, bread would be frightening. You think bread is trivial? Try to live without it.
Incorrect.
Somebody phone the news to my community retailers, please.
Yes.
... IN LOS ANGELES.
We always knew California was overheated. Next!
People on a fixed income, as well as people who are under-employed (or who don't shop), have a psychological reaction to shopping that causes them to think that everything is over-priced.
That's why the blond TV bimbo prattles on about the price of milk...even as deflation ravages her local economy.
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