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

To: pogohere who wrote (75163)	12/9/2006 10:31:28 PM
From: GST	Read Replies (2) \| Respond to of 110194

Persistent changes in price levels pog -- it comes down to what you can expect your dollar to get you in the long run. You bought gas twenty years ago. A gallon cost you fifty cents. Every year you paid more for the same gallon of gas. Now you pay 500% more for that gallon of gas. That is inflation -- a persistent change in price levels. Short term changes in price levels are not inflation, they are fluctuations. Do you expect to see a trend in the price of gas that will take you back in the direction of fifty cents over the next ten years? If that was true of the vast majority of the things you buy, that would be deflation -- a dollar would buy you more ten years from now than it does today. If you believe that your dollar is going to go alot farther year after year for the next ten years then you are expecting a deflationary environment -- lower prices for most things. If you expect your dollar to buy less ten years from now than it buys you today then you expect inflation. I expect inflation.