Where is the deflation?

Discussion in 'Economics' started by MarketOwl, Jan 6, 2010.

  1. All I see is commodities rocketing like its 2008 again and stocks going up everyday. Oil is at 83, gold is at 1137, those would have been considered astronomical 2 years ago. Yes, 2 years ago when the economy was still doing fine.

    Now we've got the economy in the crapper and oil is at 83, gold at 1137, copper at 3.50. That is pure money printing, generating inflation but maintaining a crap economy.
  2. yep it can't go on and when it stops what will happen.

    have you ever seen that cartoon when shit hits fans.
  3. Every fiat money system in the history of human kind has eventually failed. The world has really only been on fiat money for the last 40 years, yet most people think we have been on it forever.

    If i remember right, the longest a fiat money system ever lasted without it exploding was about 90 years (dont quote me on that, im going from memory), but the AVERAGE lifespan of all fiat currencies ever is between 20 to 50 years.

    We are right about at year 40 for those of you not counting. Try to remember that things started getting bad in the 90s before the dot com bubble(we were at year 20 then) Then the bubble popped and the real estate bubble started (Year 30 by then) Now the real estate bubble popped (nearing year 40) and we have nothing else left to bubble except our debt.
  4. irniger


    The answer is very clearly explained in Harry S. Dent's newest book: The great depression ahead - How to prosper in the debt crisis of 2010-2012. An eye opener for many.

  5. The US has been on fiat pretty much since FDR made it illegal for citizens to hold gold.
  6. Peter Thiel calls this situation inflation in things we need (food, energy) and deflation in things we own (our assets).

    Just as the Fed continually fails by making monetary policy when focusing on CPI inflation, we will also fail if we focus on commodity prices too much. You need to look at the entire picture. There are still massive deflationary forces at work in the developed world. Certainly much of the recent spike in the CRB may have more to do w/the weather than the Fed.
  7. wow i should get that book so i could put it beside his other masterpiece. dow 36000 by 2009.

  8. ah yes. yet another guru who has a habit of talking out of his ass

    isn't this the same guy who wrote a "best seller" saying how the DOW was going to 40,000 or some such odd number by 2010?

  9. strat3x


    Dent also wrote "The Roaring 2000s" in which he explained why the decade that just ended would sprout one of the greatest bull markets in history, due to demographics. Didn't happen, to say the least.
  10. Where's the deflation? How about IL, where I live.
    The recent asset bubble aside, haven't you noticed that one dollar buys practically what two dollars did two years ago?
    Have you been in a supermarket in the last two years? They are practically giving away food now. Five dollars off a purchase of $25. Free milk and eggs when you spend $20. Corn Flakes for $1.
    All the other retailers are giving discounts every day that they would usually have only reserved for old stock on Black Friday.
    What about house prices? The official stats are generally rubbish but my experience is that homes are selling for 40% less than they were at the peak. Rental prices in IL have dropped considerably too.
    A coworker just bought a Ford and got the equivalent of the brand new list price on their two year old car as a trade in discount for the new one.
    Who is getting a pay rise apart from the TARP bankers and the state employees?
    I see some price and wage inflation in the bloated public sector but back in the real world, the cost of living has reduced dramatically in the last two years.
    If you are paying the same prices now that you were a few years ago then you are getting seriously ripped off.
    This can't just be in IL...
    #10     Jan 6, 2010