Well, you know what I think. Deflation requires sound money and the United States does not have sound money. We have paper money and irresponsible extension of credit.
If house prices revert to what they were three years ago, that will not be general deflation. That will merely be a decline of the housing market.
I do not expect to see prices on corn, beef, copper, zinc, coffee, orange juice, oil, natural gas, lead, gold, platinum, silver, lumber, palladium, soybeans, or any other agricultural products going into a decline. I expect to see them rise. I do not expect to see wages and salaries falling.
I guess I also do not expect to see wages and salaries rising as much as the cost of commodities and many manufactured goods, and so in a sense the real standard of living will be deflated.
I hope that in the event that no substantial old-fashioned deflationary contraction occurs in the next five years, you might retract the word "silly" to describe my point of view. |
