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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Canuck Dave who wrote (41074)9/7/2005 4:10:32 PM
From: GST  Read Replies (3) of 110194
 
Those arguing deflation assume that prices are driven by demand which depends on wages -- i.e. if we can't afford things then the price will come down. Of course this makes a heroic assumption -- it assumes that we set the price. Unfortunately that is not the case. To assume that prices will fall simply because we cannot afford to buy something is the ultimate self-centered delusion. Poor people understand this clearly -- poverty just takes a little getting used to and it will be a while until it sinks in that our faltering ability to pay is not automatically met with lower prices. The US dollar is the ultimate bubble, and deflation in the dollar equals inflation in the price of goods and the credit needed to finance purchases of the goods.

What are the prospects for the Canadian dollar???
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