I heard PRECISELY your argument, and attempted to respond
you did not understand my response, and urgently urge you to check out the Perfect Storm split in our economy
I agree 100% on the finished product side -- deflation
I disagree 100% on the commodity side and imported product side -- inflation
I hear you exactly
and you miss a major major major trend
so do the great majority of US economists
they tend to think and view in aggregate terms
the Fed talks about deflation threat, in order to deceive the public into believing as you do, that deflation is continuing
it is, but only in the finished US product side, and wages, and profits
the big story is now BIFURCATION OF THE US ECONOMY
deflation from liquidations and corporate cutbacks and inventory dumping
thus, no pricing power
inflation in energy, commodities, import products, and production costs for firms
thus, rising production costs
thus, diminishing household discretionary spending, pinched budgets
therefore, further worsening crippled corporate earnings
therefore, reduced consumer spending
check Puplava's Perfect Storm series
financialsense.com
our economy is not an aggregate entity
why do you regard it as such?
it is an amalgam of many components
some are exposed to debt risk, and continued price declines
others are exposed to dollar risk, and price rises
the Fed has increased monetary expansion to an extraordinary level of growth
in some months it is rising at over 20% annual rate
this DOES NOT confirm your thesis, but rather contradicts it
also, never in US Economic history have we been spared price inflation during a declining USDollar trend !!!
falling dollar and price inflation go hand in hand
we have EXTREEEEME inflation problems, with manifestations in liquidations and declining prices in finished products in the face of debt collapse
you seriously need to elevate your analysis one level
you are missing the biggest curve ball in American post-war economic history... BIFURCATION
by the way, the next round of USDollar decline will see Asian currency upward appreciations
which will usher in increased imported product prices
thus, increasing longterm interest rates
the low pressure zone of debt-inspired price deflation
will hit the high pressure zone of dollar-inspired price inflation
powered by continued unprecedented monetary expansion feeding the vortex
producing a financial hurricane on the pressure differentials
IT HAS BEEN IN PROGRESS FOR OVER A YEAR
right under economists' elevated snobby noses
with due respect
/ jim
p.s. please dont reply again until you check Puplava's work
it is well worth your time
for instance Chapters 5,6,7 |
