jfred, perhaps it'll be stagnationary deflationary inflation. We can be sure that Big Ben will do as promised = live up to his nickname, Helicopter Ben. So far, it has been a good bet.
In the absence of war with Iran and the closure of the Straits of Hormuz, we have probably seen Peak Pricing.
Now that I'm an old geezer, and having lived through the previous oil gyrations, economic thumpings, and related wars and threats, with the hysteria about alternative fuels, it all seems a jaded deja vu.
This is as good a chance as we are likely to get of seeing the fearsome monster Deflation on the rampage. I remain cynical about its existence, though Japan certainly experienced a large scale and very extended drop in property prices. But their economy continued apace. They did have a huge external world to lean on, as did New Zealand in the late 1980s and early 1990s when the financial speculative excesses, irrational exuberance, borrow and hope came home to roost.
But the USA is so big there isn't a lot of externality to lean on. It could get ugly when politicians leap into action to "save the situation", almost certainly making things much worse and possibly causing a world record depression and even a thermonuclear world war to make previous efforts at war look amateur. After all, it is the 21st century and politicians won't be outdone by those from 100 years ago. Nationalistic and jingoistic fervour should be able to be ramped up to hysterical levels.
But it has already been over 2 years since the market clearing started and we are far from systemic carnage [though it must feel like it to the individuals concerned]. So maybe it'll turn out to be all just a bit of a burp in the financial markets and we'll be off on the road to Nirvana.
Mqurice |
