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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?


To: Jack of All Trades who wrote (71237)10/6/2006 4:47:42 PM
From: GST  Read Replies (1) | Respond to of 110194
 
<My gas for my commute is now some 30% cheaper.
-The houses that I am looking to upgrade to have fallen >30%. -I am seeing house prices per sqft come back to 1999/2000 levels and they are still not selling.>

These are good examples of what inflation and deflation are NOT -- short term price swings are not inflation or delfation. If we called every short term price swing inflation and deflation then we would have deflation a large part of the time. The fact is, since world war II, we have not had any period of deflation -- although we have had plenty of price swings. We have been in a decades long trend towards higher prices and nothing has broken that long term trend.

The idea that we face deflation is, to be a bit forward, nutty.



To: Jack of All Trades who wrote (71237)10/6/2006 5:40:25 PM
From: mishedlo  Read Replies (1) | Respond to of 110194
 
Bingo.
But to some it is only inflation on the way up, not deflation on the way down.

To me it is about credit.
I expect it to contract.
Loss of liquidity stemming from a housing bust should IMO lead the way.

Mish