Robert Prechter pounds the table for Deflation
Must be 23 yrs since we worked for the same firm and chatted on the phone shortly he left to pub EW book with Frost and start his newsletter.
And here we are.....
Excerpted from his latest comments (12/4 - courtesy of SI member SOROS) Prechter pushes the, still very contrarian, Deflation thesis. Note especially his examples of stubborn denial coming from both W.S. and their shills in the captive financial media. But, of course, you've ALSO heard that here before<G>:
<Prices are now falling across the U.S. economy. October brought the biggest one-month slide in the history of the
Producer Price Index. The CPI also registered its first monthly drop since 1986. In recent weeks, new car prices
have effectively fallen 4.7%, while used car prices are in a free fall. One revealing decline belongs to the "famed
antidepressant" Prozac. It is now being given away through a "depressed dot-com." In a bid to forestall the loss of
80% of its market share, Eli Lilly is offering free one-month supplies through WebMD. Nordstrom department
stores have reduced clothes and shoes as much as 60%. Crude materials prices have fallen for six consecutive
months, and, in October, dropped 9.1%. Since the government began keeping such statistics in 1947, the only
bigger decline was in February 2001.
The following clip is from a story on the "Glut of Bargains" in the November 25 New York Times:
"America is now on sale. Airlines and hotels are offering deep discounts. Carmakers are extending interest-free
loans. Department stores have already marked many items down sharply. The price of computers continues to
plummet. Commercial rents are falling for the first time in a decade."
The more these articles zero in on the "rising specter of deflation," the more the experts ultimately reject the
potential for an extended period of falling prices. After describing the "lingering glut" and running through a
lengthening list of price cuts, the Times article excerpted above concludes, "Deflation is unlikely, analysts say." To
paraphrase what EWFF said about a recession in January, no matter how close we get to deflation, economists
refuse to predict it. Even as a few in the media declare, "deflation is upon us," no major articles have suggested that
it will persist. This reluctance to commit to the plain fact of deflation is a perfect set-up for the next wave of falling
prices. It is further proof that a depression and not just a recession is underway because it means that many will
have to place their bets on deflation later when the spiral is further along. As more people get out of debt, sell
property and financial assets and take other steps to protect themselves, they will feed the force of the decline.>
My Deflation Call - made months ago - on this thread :
Message 16418826
WHODATHUNKIT?!
HI BOB! Time to herd mo bulls into the feed lot for slaughter. Uh...BTW....
How much gold ya got?!<g>.
Cheers,
Isopatch |
