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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Horgad who wrote (82266)5/31/2007 12:14:31 PM
From: Mike Johnston   of 110194
 
Also the fact that many things are inflating now, does not in any way invalidate the deflation argument. In a way it even supports it. Joe Six Packs are getting squeezed from every direction by inflation, but they are seeing little inflation benefit (no more house inflation, extreme lagging wage inflation).

I think what you are talking about is not deflation the way it is normally understood, but deflation in purchasing power of JQP's earnings and savings.

monetary inflation = deflation of purchasing power

As money supply goes up, purchasing power of money goes down.

That is the reason that no nation can print its way to prosperity, in fact inflation causes societal collapse and misery.

The Fed will print full steam to inflate the money supply, but the purchasing power of this money supply will go down, as it has for the last few years.
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