Hi DJ, I am at the airport lounge, ready for my first trip out of HK in two weeks, for two days in Beijing.
<<inflation-deflation>>
I do not readily accept that pervasive and sustained above norm productivity increase on a global scale is a wonderful thing for the human civilization system.
Productivity is good for a few who are able to tap into the productivity, for a while, before it invades the rest of the system and appear as deflation, unemployment, and ever diminishing cost (i.e. someone else's revenue).
I believe, at any given time, there is a natural limit to productivity good before it starts to poison the system, much as too much vitamin in one 24 hour period is not a good idea.
So, my script: bubble and its implosion caused price deflation, especially in manufactured goods out of over-capacity industries, followed by wild price inflation, especially in cost of limited resources.
I am not sure about service prices, as in medical care and such, because on the one hand, the prices should and are increasing, but OTOH, folks are opting out of expensive HMO programs. The opting out will pick up speed as real income fails to keep in pace with service inflation, as taxes rise, and as employment/prospects fall.
On the coming round of Financial Survival Game, timing will be more critical than all previous times. Not all can be winners, because the pie will get smaller, or more will have a bite of the same pie.
Reduced expectations on income, investment gain, etc will be the norm, before or after the collapse.
Chugs, Jay |
