Deflation is winning

[barnaby33]

The dollar’s strength is likely temporary, as bad news will continue to emerge from the U.S. economy, and the Fed and Treasury will support a weakened dollar in order to prop up our export economy. The current situation seems unsustainable.

Fearful, all things are temporary care to hazard a guess? As to the unwinding of the carry, that is a knock on effect of the deflation. The Japanese have sustained enough losses that they are saying no mas. That currency is being repatriated yes, or rather parts of it are. I suspect that many of the Japanese banks that have been doing this are sustaining losses though which chills lending, which shrinks the money supply. Though I say up front I have no proof or insight.
Josh

[peterb]

Kwep. I think you’ve hit on what I’ve been thinking as well….we’ve just been through the incredible credit bubble and that WAS the inflationary period. And now we’re headed back to the mean. Since it started, big time in 2002. Then that’s the prices we’re headed towards and we’ll probably over-shoot as most reactions do.
Think about it. Wages did not grow, but the availability of money grew exponentially as debt. The economy was growing entirely on debt to a level where the debt could no longer be sustained. But this was hugely inflationary as it allowed all that extra currency to chase goods and services. Now the debt is going bye-bye and we’re left with real wages to support the price of goods and services. Hence we’re in deflationary pressure. And this feeds on itself as people are unwilling to spend and dont/cant borrow. As well as lenders are hesitant to lend since they just experienced defaults and huge losses. Throw in unemployment fear, and we’re going down this path for a while yet. IMO.

[peterb]

Kwep. I think you’ve hit on what I’ve been thinking as well….we’ve just been through the incredible credit bubble and that WAS the inflationary period. And now we’re headed back to the mean. Since it started, big time in 2002. Then that’s the prices we’re headed towards and we’ll probably over-shoot as most reactions do.
Think about it. Wages did not grow, but the availability of money grew exponentially as debt. The economy was growing entirely on debt to a level where the debt could no longer be sustained. But this was hugely inflationary as it allowed all that extra currency to chase goods and services. Now the debt is going bye-bye and we’re left with real wages to support the price of goods and services. Hence we’re in deflationary pressure. And this feeds on itself as people are unwilling to spend and dont/cant borrow. As well as lenders are hesitant to lend since they just experienced defaults and huge losses. Throw in unemployment fear, and we’re going down this path for a while yet. IMO.

[peterb]

Kwep. I think you’ve hit on what I’ve been thinking as well….we’ve just been through the incredible credit bubble and that WAS the inflationary period. And now we’re headed back to the mean. Since it started, big time in 2002. Then that’s the prices we’re headed towards and we’ll probably over-shoot as most reactions do.
Think about it. Wages did not grow, but the availability of money grew exponentially as debt. The economy was growing entirely on debt to a level where the debt could no longer be sustained. But this was hugely inflationary as it allowed all that extra currency to chase goods and services. Now the debt is going bye-bye and we’re left with real wages to support the price of goods and services. Hence we’re in deflationary pressure. And this feeds on itself as people are unwilling to spend and dont/cant borrow. As well as lenders are hesitant to lend since they just experienced defaults and huge losses. Throw in unemployment fear, and we’re going down this path for a while yet. IMO.

[peterb]

Kwep. I think you’ve hit on what I’ve been thinking as well….we’ve just been through the incredible credit bubble and that WAS the inflationary period. And now we’re headed back to the mean. Since it started, big time in 2002. Then that’s the prices we’re headed towards and we’ll probably over-shoot as most reactions do.
Think about it. Wages did not grow, but the availability of money grew exponentially as debt. The economy was growing entirely on debt to a level where the debt could no longer be sustained. But this was hugely inflationary as it allowed all that extra currency to chase goods and services. Now the debt is going bye-bye and we’re left with real wages to support the price of goods and services. Hence we’re in deflationary pressure. And this feeds on itself as people are unwilling to spend and dont/cant borrow. As well as lenders are hesitant to lend since they just experienced defaults and huge losses. Throw in unemployment fear, and we’re going down this path for a while yet. IMO.

[peterb]

Kwep. I think you’ve hit on what I’ve been thinking as well….we’ve just been through the incredible credit bubble and that WAS the inflationary period. And now we’re headed back to the mean. Since it started, big time in 2002. Then that’s the prices we’re headed towards and we’ll probably over-shoot as most reactions do.
Think about it. Wages did not grow, but the availability of money grew exponentially as debt. The economy was growing entirely on debt to a level where the debt could no longer be sustained. But this was hugely inflationary as it allowed all that extra currency to chase goods and services. Now the debt is going bye-bye and we’re left with real wages to support the price of goods and services. Hence we’re in deflationary pressure. And this feeds on itself as people are unwilling to spend and dont/cant borrow. As well as lenders are hesitant to lend since they just experienced defaults and huge losses. Throw in unemployment fear, and we’re going down this path for a while yet. IMO.

[moneymaker]

I was all gung ho about buying a house, then I just heard today that so and so isn’t here anymore. Wow, am I next? Don’t really know the real story, seems like I’m always the last to hear. Just got me thinking though with jobs scarce do I really want to invest in something that might become an albatross around my neck? Don’t think the family can survive very long with just 1 income earner and a mortgage to boot.

[moneymaker]

I was all gung ho about buying a house, then I just heard today that so and so isn’t here anymore. Wow, am I next? Don’t really know the real story, seems like I’m always the last to hear. Just got me thinking though with jobs scarce do I really want to invest in something that might become an albatross around my neck? Don’t think the family can survive very long with just 1 income earner and a mortgage to boot.

[moneymaker]

I was all gung ho about buying a house, then I just heard today that so and so isn’t here anymore. Wow, am I next? Don’t really know the real story, seems like I’m always the last to hear. Just got me thinking though with jobs scarce do I really want to invest in something that might become an albatross around my neck? Don’t think the family can survive very long with just 1 income earner and a mortgage to boot.

[moneymaker]

I was all gung ho about buying a house, then I just heard today that so and so isn’t here anymore. Wow, am I next? Don’t really know the real story, seems like I’m always the last to hear. Just got me thinking though with jobs scarce do I really want to invest in something that might become an albatross around my neck? Don’t think the family can survive very long with just 1 income earner and a mortgage to boot.

[moneymaker]

I was all gung ho about buying a house, then I just heard today that so and so isn’t here anymore. Wow, am I next? Don’t really know the real story, seems like I’m always the last to hear. Just got me thinking though with jobs scarce do I really want to invest in something that might become an albatross around my neck? Don’t think the family can survive very long with just 1 income earner and a mortgage to boot.

[kewp]

[quote=sdduuuude]Read somewhere that Japan entered their period of deflation with net savings. We enter ours in debt.[/quote]

Savings is deflationary!

Japan got hit with a double-edged katana during their deflationary period. A nation of savers that honor their debts.

We have neither of those problems here in America!

[kewp]

[quote=sdduuuude]Read somewhere that Japan entered their period of deflation with net savings. We enter ours in debt.[/quote]

Savings is deflationary!

Japan got hit with a double-edged katana during their deflationary period. A nation of savers that honor their debts.

We have neither of those problems here in America!

[kewp]

[quote=sdduuuude]Read somewhere that Japan entered their period of deflation with net savings. We enter ours in debt.[/quote]

Savings is deflationary!

Japan got hit with a double-edged katana during their deflationary period. A nation of savers that honor their debts.

We have neither of those problems here in America!

[kewp]

[quote=sdduuuude]Read somewhere that Japan entered their period of deflation with net savings. We enter ours in debt.[/quote]

Savings is deflationary!

Japan got hit with a double-edged katana during their deflationary period. A nation of savers that honor their debts.

We have neither of those problems here in America!

[Author]

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