The great inflation days of the 70's were sparked by the oi embargo.
At the time, the mentality had no notion of being "conservationist" when it came to use up resources. So, transportation and industry at large HAD to buy oil and oil derivatives.
Remember the muscle cars of the 70's --quite powerful motors [*and quite wasteful too*].
Once ignited, as you say, hard to stop it takes on life of its own.
Today, the circumstances are different.
For starters, all methods of production in probably most industries are far more efficient than in the 70's therefore, the supply side of things is far better prepared to cope with whatever possible demand, including low cost to produce things. (Read: cheap labor from 3rd world countries).
So... yes, if one is offered cheap money to buy things... for a while it will help... but one has to be careful that the respective debt service can be serviced. that means one has to be in a positive cash flow situation... the next question is what kind of asset can continue to be productive under the current environment ?
Unless there is growth in the job landscape... at which point any asset will continue to be attractive/productive ?
Anyway.... you get the point (I assume) I could continue to make all kinds of "what if's" followed by projections but then .... I would start sounding like a weatherman -g
my opinion is.... not inflation (read above) and not really deflation either why ?
because in the 30's we did not the third world to buy things (and they are very willing to btw, they just don't have plata)... but they are millions of them... and so... the little they earn and spend multiplied by gazillion million billion of them... well, will somehow amount to some demand....
result....
I think we are just going to be... well... going sideways in most everything (like the last threee days or so of this boring and frustrating market)... almost a flat line... These days they have so many tools, and have a few "magicians" that can produce all kinds of smoke and mirrors in front of a willing population to believe all kinds of bs...
I think patience will be well rewarded, something I have little of... perhaps old age will reward me with an increased amount of the stuff. -g
there will also be [naked women] in mixed showers, with overcast sunshine and raining melting snow, if you can imagine that -lol |
