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EmailDeflation Is Not On The Menu
April 19, 2010
Executive Summary
- Why creating inflation is our official policy.
- Deflation would destroy our economy, our financial system, our hopes, and our dreams.
- For budgets and pensions to be repaired, we badly need a return of economic growth. Or inflation of our asset markets. Or both.
- The flood of liquidity that we've been tracking is very real and is distorting prices for all financial assets.
- This 'recovery' is a gift. Use the time wisely.
A constant debate rages over whether we will ultimately head down an inflationary path or get sucked into a deflationary whirlpool. In fact, the most common question I am asked at my public talks is whether the future will consist of inflation or deflation. So I thought we'd spend a bit more time on the subject here.
While I can't tell you which will happen for certain, I can tell you that the inflationary path is infinitely preferred over deflation by our fiscal and monetary authorities. Given their druthers, we'd most definitely head down a path of inflation. While a renewed bout of deflation may be in our future, it is simply not among the acceptable range of policy options.
Your faithful information scout,
Chris Martenson
Copyright 2010, Chris Martenson. All rights reserved.
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Great analysis!
However, I'm having a difficult time reconciling hyperinflation with the peak oil (or even peak energy) crisis. It seems to me that no amount of money printing can overcome these natural limits on economic growth, and as oil prices rise we wil continually bounce back into recesssion until there is a complete breakdown...
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Sorry I just had to comment on the title.
Deflation is the indigestion that you experience after you have eaten what is on the menu, LOL.
Looks like a good report.
Best...Jeff
My latest prediction:
People with bad credit or those who have been foreclosed on will start qualifying for mortgages again. For example, someone who purchased a home for 500k in 2005, who had a dti of 50% plus, will be able to qualify in a few years for a similar sized house at the price of 250k...
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The theme of the essay is that the elites will do whatever they can to avoid deflation, and that they are perfectly willing to supply massive floods of liquidity to prevent it.
But they also fear currency crisis, dollar crash or hyperinflation...
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An incisive and concise analysis of our situation Chris. You have great credibility with me because you are knowledgable about economics and finance, yet you are research based, skeptical, detached, and search for objective conlusions for practical use...
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An incisive and concise analysis of our situation Chris. You have great credibility with me because you are knowledgable about economics and finance, yet you are research based, skeptical, detached, and search for objective conlusions for practical use...
Enroll today to read more.
I assume the United States is the sovereign you mean when you say "sovereign debt crisis?"
Thank you for the great report, as always.
Super read! Thank you for more fine work.
Lemonyellowschwin wrote:
I assume the United States is the sovereign you mean when you say "sovereign debt crisis?"
Thank you for the great report, as always.
No, I am not referring to the US exclusively, although the US is one of the top contenders...
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