[quote=livinincali][quote=CA renter][quote=paramount]Are there deflationary signals right now? In the bond market maybe?[/quote]
There have been deflationary signals for many years. Why do you think the Fed has been intervening so much in our economy? ZIRP is almost always a sign of deflation, IMO.[/quote]
Yup we’re doing the same thing as Japan’s been doing for the past 20 years. Fighting deflation at all costs. In doing so, we are slowing down the growth of our economy as too many productive assets have to be allocated to debt repayment. If you let the too big to fail, actually fail you solve many of the problems in the economy including income inequality. Now people sitting on the other side of the balance sheet looking to collect rent on the productive segment of the population hate this idea, but it would get our economy growing again as we’d have more money to invest in productive things.[/quote]
Absolutely agree. Not only are we allocating too much money to the repayment of debt, but the Fed’s policies are pushing more and more money into speculative activities and they are doing it with more and more leverage, too. IMHO, the Fed’s (and govt’s) policies of the past few years will end up doubling or tripling the damage, over the long run, that we would have experienced if things had been allowed to fail in 2007-2012. We’d be on our way to a healthier, more sustainable economy today.
