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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?


To: mishedlo who wrote (77751)4/15/2008 11:48:34 PM
From: koan  Respond to of 116555
 
mish; "
What peaked my interest is that I do not hear anyone (cnbc pundits, or others) talking about how inflation will push up interest rates.

Perhaps because we are in deflation

Actually we are in deflation but those on CNBC and most here do not know it."

koan; "Well, that is the debate for sure. Everyone worried about what happened in Japan."

I think they can prevent deflation. I think we are headed for stagflation exactly like the late 70's.

The whole world is facing inflation from creation of massive amounts of liquidity and the resultant use to buy commodiities. Now countries are fighting over rice, wheat, corn and coal, steel and oil.

So prices are rising.

I am not sure what people mean when they say we are in deflation. We are in a state of economic contraction, while at the same time the world has commodity shortages everywhere becasue eveyone has lots of money.

I do not know what that means or how to handicap it, except I am pretty sure prices will not go down without a rise in interest rates causing a real recession and becasue most of the currencies are being debased.




To: mishedlo who wrote (77751)4/16/2008 4:27:25 AM
From: stockfiend  Read Replies (2) | Respond to of 116555
 
Low interest rates do not equal deflation. Credit contraction does not equal deflation. People walking away from their homes does not equal deflation. Can these events lead to deflation? Sure. Have they yet? Not even close.