Thanks, it was --though everyone's clear that this can change and that it's debatable. What I'd like to understand is why so many people oppose the fight against deflation, calling it a 'wallstreet bailout' that's 'funding Obama's spending' and that we're falling into Germany's 1922 hyperinflation. So many FR threads on that topic and there are a lot of reasonable good people that go along. Don't know what I'm missing here.
“What I’d like to understand is why so many people oppose the fight against deflation”
I think there is a disconnect on what is inflating and deflating. They leave out food and energy which is in everybody’s budget. When you go buy gas at $4.00 a gallon and not that long ago it was $3.00 it is hard to wrap your head around the deflation side of the argument. Same thing at the grocery store. I’ve yet to hear anyone say “hey remember when a dozen eggs was five bucks? WTF!
Most people see prices creeping up in their day to day lives and don’t picture the problems with deflation. I’m not even sure I entirely understand why they fear deflation so much more than inflation.
What deflation? .1% (annualized) could be a rounding error and is most certainly within the margin of error.
What I'd like to understand is why so many people oppose the fight against deflation, calling it a 'wallstreet bailout' that's 'funding Obama's spending' and that we're falling into Germany's 1922 hyperinflation.
I don't believe we're going to experience hyperinflation, not with the money velocity we've got currently. As conservatives we recognize that when government interferes in the market it causes/creates problems. Why do we think the Fed is any different? So far its policies have punished savers and the prudent, while rewarding spendthrifts and lenders. How is that a pro-market, pro-commerce stance?
American history proves that deflation isn't a permanent characteristic of free markets. Where is the 'deflation trap'?