The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: mishedlo who wrote (56305)	3/20/2006 9:22:42 PM
From: suanny	Read Replies (2) of 110194

Mish I believe the question we all are debating with ourselves about is when the bubbles are resolved one way or the other,will we be seeing higher or lower prices on the basket of goods I personally purchase every month.Also how will the purchasing power of any of my investments fare in that time.I like John believe I have experienced double digit increases of prices in my basket for the last 3 to 4 years,however if my income were much higher I probably would be purchasing more goods that have dropped in price and my experience with double digit price increases overall would be much lower.One item I have a lot of experience buying is a gallon of milk on my way home at the 7-11 store in which I rarely use due to high prices,but 4 years ago $2.65 a gallon didn't seem to bad.Within 1 year the price at that store nearly doubled to approx.$5.00.Since then the price has backed off to approx $4.00 and could purchase the same gallon at cosco 15 miles away for $3.00 in any event the price at 7-11 is still up 40%.I believe the debt bubble should resolve itself in deflation;but, I'd be more comfortable if I was experiencing as much in the way of lower prices overall like you Mish.One aspect of the Mish argument for deflation has to do with the bankers not wanting to be repaid with cheaper money.It seems to me that has been the case for some time especially in the 70s,and would be a better option than having houses that are depreciating in value and needing to be heated and maintained on their books.Also a guy on Financial Sense this weekend suggested that wage arbitrage would be neutralized by potectionism,causing higher prices in an otherwise deflationary situation ,would like to hear your thoughts on these Mish.

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