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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: lifeisgood who wrote (90078)1/4/2008 3:11:19 AM
From: GST  Read Replies (2) of 110194
 
<What GST doesn't seem to understand is that if you've been saving in Euros or Silver/Gold coins, there has already been massive deflation vis a vis US goods.>

LOL -- this is getting silly. Do you think that Canada, to pick one example, whose currency rose from 65 cents to the US dollar to par today is caught in the grip of "deflation"? Oil, to pick but one example, has doubled in US dollars in the past year -- do you know of any currency that has doubled in relation to the dollar? Deflation is rare. Inflation is the norm. And in the US, deflation is practically an impossibility at this point in time. There is global demand and global supply and globally traded currencies. There is global inflation in almost all currencies. The US dollar just happens to be one of the crappiest currencies. Rising currencies are cushioned to a degree from inflation. We enjoyed this benefit when we had a strong dollar. But we did not have deflation. Fleeing the dollar makes sense -- everybody is doing it and so should you. But that does not mean there is deflation in Canada, or Europe, or China. Believing in deflation at this point in time is one stop short of idiocy -- no offense intended (seriously, no offense meant by use of these words). I state it so strongly because there is just no case whatsoever for deflation in the US or anyplace else for that matter at this point in time, and the fact that it comes up so often shows how easily people can get confused. Recessions happen all the time. Deflation doesn't.
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