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

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To: russwinter who wrote (69831)9/15/2006 3:02:10 PM
From: GST  Read Replies (3) of 110194
 
Inflation and deflation refer only to persistent trends. This idea that oil drops from $77 to $63 and it is "deflation" reveals a lack of basic understanding of the concept -- inflation and deflation are only meaningful when one looks beyond short term price movements in either direction. There is no need to waste time arguing about whether or not we have been experiencing inflation for the past 30 years -- we have and it is crystal clear. The argument that we are going to tip from inflation to deflation is entirely without any supporting data that I have ever seen. We have however had forces of dis-inflation that have restrained inflation and these forces are whithering. Cheap Chinese imports are a primary example. This whithering of dis-inflationary forces suggests that we are likely to experience an intensification of inflation in the future. But nowhere are there any signs of deflation.
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