Inflation and deflation are hard to pin down. So many prices...some moving up, some moving down...so much contradicting data. If we are in inflation now and so many things are opposite now, does that mean we were in deflation before?
Before: low energy prices, low commodity prices, low food prices, low priced junk from China, rising dollar, rising stock market, rising house prices, flat to rising salaries. In other words for most people lower living costs, rising asset values, and flat to rising incomes.
Now: high energy prices, high commodity prices, rising food prices, rising prices of junk from China, falling dollar, flat (soon to be?) falling stock marker, falling house prices, falling salaries. In other words for most people higher living costs, falling asset values (some completely destroyed), and falling incomes.
So do living costs, assets, and salaries need to be rising for inflation? Do they all need to be falling for deflation? I think I would have to say for the most part yes and that we have moved from a near utopic economic state (as far as the masses are concerned) to stagflation and not inflation or deflation. So where do we go from here? |
