Posted on 02/26/2015 11:37:16 AM PST by blam
February 26, 2015
Austin Galt
This analysis will cover the CRB Continuous Commodity Index, the US Dollar index and one of the main commodity currencies, the Australian dollar.
We’ll begin with the CRB Continuous Commodity Index which comprises a mixture of components from sectors including energy, metals, soft commodities and agriculture.
(snip)
If this analysis is correct, it means a big deflationary spiral is dead ahead that will see market participants wide-eyed with fear. However, there should be a significant rally before then which will allow many to get their houses in order.
And once this deflationary spiral has run its course, an inflationary bang of epic proportions should commence that will go down in history as one for the ages.
(Excerpt) Read more at marketoracle.co.uk ...
FRegards
So why do they want inflation...because its not in their interests.
The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve's mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public's ability to make accurate longer-term economic and financial decisions.
On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling--a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.
http://www.federalreserve.gov/faqs/economy_14400.htm
Deflation is good, if government doesn’t make it permanent. Eventually in a free market prices find a bottom, investors see value and money flows back in.
Instead we’ve got crony capitalism and more government debt. Deflations in America worked themselves out as the GD was until government stepped in.
Look up the Long Depression for an example of what happens in a free market deflation.
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