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To: P.O.E.
Those who think there must be raging inflation because oh no, there is more money supply now than at the top of the bubble, are deluded. Today US households have $7.8 trillion in bank deposits and CDs, up from $6.7 trillion in 2006. This is supposed to cause inflation, despite the same households having $4 trillion less in house equity, $4 trillion less in stocks, $3 trillion less in pension assets, $1 trillion less in mutual funds, and $1 trillion less in small business equity.

People unclear on the concept - it is *deflation*.

74 posted on 09/14/2009 4:34:53 PM PDT by JasonC
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To: JasonC

Agree there is aggregate deflation, but the devil’s in the details of what’s in the basket used to calculate inflation. I posit that there is considerable erosion of purchasing power in consumables (especially when combined with lower wages).


78 posted on 09/15/2009 5:04:27 PM PDT by P.O.E. (What's up with THAT?)
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