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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Knighty Tin who wrote (5176)4/28/2004 2:55:14 PM
From: mishedlo  Read Replies (1) of 116555
 
A deflationary collapse requires two special factors to be present:
1. A strong or desirable currency that people are content to hold;
2. An inability by monetary authorities to create new money at will.
kitco.com
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I do not think it requires either of those.
I prefer these two

1) more goods chasing fewer $
2) refusal of people to take on more debt regardless of how much money is printed

#1 will happen in a declining jobs and wage environment with overcapacity to produce goods. It is enhanced if non-discressionary costs rise at the same time (oil, food, and medical)
#2 can be voluntary (people just stop buying on their own accord) or non-voluntary (credit standsrds are tightened and banks do not lend regardless of how much money the FED prints)

I would say Kitco is wrong
Mish
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