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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: benwood who wrote (77794)4/17/2008 1:55:36 AM
From: mishedlo  Read Replies (2) of 116555
 
Because of contracts, my company won't have any semblance of a cost of living raise for at least 18 months, which means my salary will decline another 10-15% prior to what optimistically will be a raise of 1/2 the going inflation rate. Retail inflation persisting at the current 11-12% rate for another 30 months means my salary will be down approximately 20% in real terms from today. And today is already down 5% from last year.

My situation is hardly unique.

Indeed.
It your situation is commonplace.
So people cut back.
They stop eating out.
They vacation closer to home.
They stop going to nail salons.
They stop all sorts of frivolous stuff.

So corporations hire less, build fewer stores, start laying off.....

So people out of work or working fewer hours cannot pay the bills
So people walk away
So people go bankrupt
So banks go bankrupt
So credit is destroyed

So that is deflation.
That is what I am calling for.

Mish
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