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.
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.
Debt default is deflationary. Debt itself is neutral to inflationary. We’ve had this discussion before.
There has been a truly epic and historic effort to ward off the deflationary effects of the financial crisis over the past several years. Much to the chagrin of many, it’s been somewhat successful, for now at least.
What we’re seeing is distorted as a result. For those closer to the subsistence level, who are not in any way living off government subsidy, an increasing amount of increasingly dear income is required.
For instance, your typical box of snack foods. Yes, it’s not the wisest choice and not the healthiest choice, but it’s gone from 99 cents to $2.50 on sale in the past three years. Watched it happen. Breakfast foods in particular have skyrocketed.
Lower and middle class wage earners are being squeezed from both sides, and are not experiencing deflation in any meaningful sense, as far as day-to-day expenses, while what investments they’ve managed to accumulate and hang onto are collapsing.
What to call this is a puzzle, but it’s pernicious. Another severe round of financial crisis is really going to hurt such people. I’m unfortunately slipping into that category, myself.
Who will retain the cash to capitalize after the second leg down that we all sense is coming? We know who is being funded to the tune of trillions. Government special interests and financial institutions, an unholy alliance of sorts. Sounds more than just sort of fascist to me.
There’s an answer. Call it “squeezeflation.” Take more money. Higher cost for necessities, decimate investments available to the lower and middle classes.
In that case, it is good to be a federal contractor. Rates don't change. :)
Falling salaries. Falling employment (fewer jobs). Falling home prices.
Deflation.
I thought you were old enough to remember "stagflation".
Yep, the deflation/inflation argument is about over.
We are in for very hard times.
Remember....God, guns, grub, and gold.