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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Horgad who wrote (90092)1/4/2008 3:39:49 PM
From: GST  Read Replies (9) of 110194
 
In my lifetime there has never been deflation in the United States. Going forward it is highly unlikely there will ever be inflation in my lifetime. Deflation is a very, very rare event -- so rare that it is almost impossible to come up with meaningful examples of it. Inflation is not only the norm, it is the dominant mode for all industrialized countries active in the global economy -- it is extremely difficult to identify any examples of deflation anywhere in the world in the past 50 years -- Japan being an exception. The general and extremely persistent trend in price levels across all currencies and all countries has been and continues to be inflation. Present circumstances point towards a sharp upward rise of the rate of inflation. We have enjoyed moderate inflation in the last ten years or more -- but the trend has shifted in recent years and threatens to lead to much worse inflation. It is amazing to see people on this thread and other threads talk about deflation like it is something they have ever seen in their lifetime or ever experienced personally -- in all likelihood you have never personally experienced deflation and you never will. You will experience all kinds of price movements and all kinds of economic conditions, including rapid growth and recession -- but not deflation.

It is like the difference between a headache and a brain tumor -- everybody gets headaches, but brain tumors are thankfully not that common. If you got your medical advice on threads like the one Mish runs, you would be told that you are developing three or four brain tumors a week -- every week. Actually, the odds that most people will get three or four brain tumors a week are probably higher than the odds of deflation in the US a this point in time.
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