This guy must be right. I can tell from my grocery bill and my health insurance bill and my electricity bill that the price of everything is falling like a rock.
NOT!!!
It’s a tough call, inflation vs deflation.
Most of my investment bets are on inflation, but my guru believes in deflation and tells me to study Japan.
There are good arguments on both sides.
You are looking at “goods and services”. Now, the price of your home? Did it go up, or down.
He is right.
Watch the coming twelve months. The only thing that will keep it temporarily away is a huge injection of more deficit spending. That won't happen this close to an election cycle.
Basic services and commodities will continue be in strong demand as the developing world grows. We will see inflation with these asset classes. However, discretionary income and wealth is declining in the US and Europe reducing demand for discretionary spending in the middle class and upper income classes (excluding the truly wealth 20x millionaires and above). Basically, we are seeing equalization of the middle classes throughout the world because of globalization.
The US can grow the middle class again if it returns to free market principles by electing conservatives.