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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (18925)	9/23/2004 11:07:39 AM
From: russwinter	Read Replies (1) of 110194

Your logic is circular, and reflects the standard "mainstream" interpretation of inflation. I just don't think you can pick and choose your inflation victims. Some people win (apparently by substituting water for Coke?), and others lose (eat the costs). Think of the process like popcorn, little kernels going off unexpectedly. That's what makes inflationary climates brutal and unstable. When I read the Hudson comments, I see the term "price and cost increases" used repeatedly over and over, so why do you make any distinction about who loses the most? And are you saying inflation has no impact when consumers start to give up products they are used to using? In theory I suppose you (and Greenspan) could extend your "pricing power" argument to the point where consumers substitute dirt and water (still free) for everything they use, and therefore you have deflation (because everything else is just excluded). To me substitution sounds like a major impact, and thus I completely fail to see your point.

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