Ahaaha, I'm not familiar with Stephen Roach [hadn't heard of him until earlier this year] who some seem to think is a soothsayer extraordinaire. But here's my comment about what he was saying re deflation: Message 17104960
For years I've been arguing that when the crunch comes [now come], Uncle Al would prevent deflationary implosion [jfred and I were discussing this way back then] by super-pixelation of billions of new US$. I had my doubts that he'd be able to prevent a cascading, margin-limit crashing, stop-loss avoiding step function, collapse into a stupendously huge financial black hole.
But my doubts were small enough for me to leave all my investments on the table with the expectation that Uncle Al would print up a storm of new money, hack interest rates and slow the market clearing process sufficiently to have due process as assets were transferred, debts cleared, court processes carried out etc. Sure enough, the process is very far under way and there has NOT been any implosion, no deflation [in the way I mean it], no collapse, no recession or depression, no mass unemployment.
Uncle Al did what I hoped and the process has gone as I hoped. So far, so good.
The deflationary implosion I worried about was the sort that happen every century or so. I don't think a collapse was an absurd thing to consider given the size of the bubble and the messes around the world. <It isn't possible to have deflation because the FED won't permit it. Since FED won't permit deflation we only ever can have some degree of inflation. Therefore, discussions about deflation are absurd >
Who's afraid of the big bad wolf?
Mqurice |
