Where is the deflationary spiral??

Discussion in 'Economics' started by stock_trad3r, Feb 10, 2009.

  1. Deflationary Spiral is pure economic fear mongering.

    Brought to you by the fractional reserve banks of America.
     
  2. Are you mad?

    Have you looked at the dates on your chart? Is it perhaps a coincidence that it says '1931-2006' on it?

    Whatever the merits of the argument you're making might be, your punchline has no relation to the chart you offer as evidence.
     
  3. as an excuse to create an inflationary spiral
     
  4. 1) The CPI is "fudged" too much to have any relevance to reality.
    2) The chart may look "better" if it were log-scale instead of arithmetic scale. That should indicate a line losing upside momentum and getting ready to trend lower in a sustained fashion. :cool:
     
  5. america can not afford a massive deflation, the greater the deflation the more the people and corporates who default on their loans. Since there's more debt than cash, if enough people default on their loans the USD will collapse. So basically either let the currency collapse or save but devalue it through inflation

    inflation is inevitable, real estate prices falling is a bubble bursting, but increase in food and energy prices is first to come, after that rents will go up, and the rent to mortgage rates will increase, but majority of the people won't quality for a mortgage, only a certain class of people will be buying properties and renting them out, while most others will only be able to rent
     
  6. This chart is JUNK! First, the use of a linear scale intentionally misleads. Redo this chart with a logarithmic scale and you will see that the 1913-1920 period was the worst inflationary period in the data set. And that the deflationary spiral of the Great Depression lags the stock market crash by a year. Second, the chart doesn't even show the period of concern, which starts in somewhere in between mid-2007 to mid-2008. Third, the chart doesn't even measure the right variable for assessing deflation which would be asset prices more so than consumer prices.
     
  7. jprad

    jprad

  8. #10     Feb 12, 2009