Deflation Theory Is Lemon We Have All Been Sold

Discussion in 'Economy' started by Kevin_Kennedy, Aug 18, 2009.

  1. Kevin_Kennedy
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    Kevin_Kennedy Defend Liberty

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    Deflation Theory Is Lemon We Have All Been Sold: Matthew Lynn - Bloomberg.com
     
  2. Paulie
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    Paulie Platinum Member

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    Good article, but a point that is no doubt lost on those who aren't capable of thinking outside the box.
     
  3. Bill O'Olberman
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    Bill O'Olberman Active Member

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    Would deflation correlate with a loss in wages? But I am sure its still possible to see increases in real wages. And of course things such as your mortgage payments, car payments, student loan payments, or any debt one has will increase in real terms.
     
  4. Richard-H
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    Richard-H Gold Member

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    Deflation and inflation in moderation are both a healthy economic adjustment. Either one in excess is a sign of major economic problems, but probably not a cause in and of itself(s).

    A major cause of economic problems is excessive actions to directly prevent either one. The obsessive anti-inflation actions taking throughout the past 30 years have caused us to get into this economic hole -now it's such a mess that we're in a deflationary period. Now their screwing up the economy with anti-deflationary actions.

    The problem with economists is that they focus almost entirely on the hording of capital and capital assets. They don't give a damn about the real underlying economy.
     
  5. Kevin_Kennedy
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    Kevin_Kennedy Defend Liberty

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    Anti-inflation actions of the past 30 years? What were those?
     
  6. Paulie
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    Paulie Platinum Member

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    Yeah Richard, what "anti-inflation actions" got us into this hole?

    Because as I see it, it was INFLATION actions that got us into this hole. It has become almost common knowledge at this point that there was too much money created, and too loose of credit, that led to this current mess.

    How else could a bubble of this magnitude form? You don't get bubbles from "anti-inflation actions". That's preposterous on so many levels.
     
  7. Toro
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    Toro Diamond Member

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    Deflation is occurring, only in small doses.

    Without the massive intervention by the government, I believe deflation would have gotten much worse.

    Now, however, we are going to have inflation. Not consumer price inflation, but asset inflation, like we did with housing, only it will likely be with other real assets such as gold and silver.
     
  8. Paulie
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    Paulie Platinum Member

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    Is it possible we're seeing asset inflation right now in equities?
     
  9. Toro
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    Toro Diamond Member

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    Probably. But it is likely to go significantly higher if I am correct.
     
  10. Paulie
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    Paulie Platinum Member

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    When I look at the monetary base graph, I can't help but wince.

    Just imagine the horrible possibilities.
     

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