The case for deflation

Discussion in 'Economics' started by Zlatko, Sep 2, 2008.

  1. Zlatko


    I'm no macro analyst, I just look at the charts and trade what they tell me. But recently they have told a strange and unexpected story, and that story is deflation.

    Commodities lower - check
    USD higher - check
    Treasuries higher - check
    Stocks lower - check

    How plausible do you guys think it is?
  2. Rickb


    Credit contraction being larger than monetary infusion = deflation.

    Commodities were the last bastion of inflation.

    Deflation isn't all bad if you know it is coming.
  3. Do the two of you have the same IP address? :cool:
  4. piezoe


    Slow, very slooow deflation in housing and building materials from here out, no deflation in general economy, just an eventual cooling of inflation. This is not Japan, not yet anyway.
  5. Mvic


    Alot will depend on how the massive GSE and corporate debt that is up for refinancing from now until the end of Dec is received. If poorly a global deflation scenario is quite possible. Currently cash is really the only safe place to hide.
  6. Mvic


    It's beginning to look a lot like defaltion, everywhere you go...
  7. Actually....the case for deflation is rather strong when one considers that the US is a credit driven economy, and that several trillion in credit is being pulled.....

    What is going to replace this money....that is no longer going to be factored in to chase goods and services....?

    How do prices go up.....when there is a lot less money around ?
  8. What happened to all the inflation bulls? :eek:
  9. piezoe


    You can make a case for deflation, but i think the need for the US to monetize its debt will overide. (In even less polite circles than ET this is referred to as "inflating ones way out of debt.") Furhermore, it seems the Fed considers deflation a more serious problem than inflation and so i would expect the Fed to do what it can to prevent deflation.
  10. Hey . . . stop using COMMON SENSE.
    You might throw a monkey-wrench into all of the Helicopter Ben "bashers" here on ET!

    #10     Sep 4, 2008