The rebirth of deflation

Again, this a bit technical, but if you’re an econ nerd like me, you’ll find this informative.

Download the_rebirth_of_deflation.pdf

Lays out a pretty good case to expect the price level to be negative in the US next year.  For all the negative connotation with the word "deflation", a year or two of lower prices can actually be beneficial in that it increases consumers’ purchasing power, particularly for food, gas, clothing and shelter.

Doesn’t sound too bad, now does it?  It should be noted that the economic elite in this country have a vested interest in promoting inflation, so the Fed and Treasury and Congress will be fighting it tooth-and-nail.

One thought on “The rebirth of deflation

  1. I show the BOE at 3% to banks vs 1% Fed Funds- plus less subprime toxicity in UK – ergo despite pleasant drop at the pump, deflation won’t be as dramatic or beneficial here. Fully agree on the preposterous bailout as pro-inflationary scam to maintain delta between avg income and real estate prices, driving up income and thus more taxpayers into higher brackets, and keeping crappy bankers employed.

    Like

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