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The personal advice threads are full of save or pay down debt while the macro economic threads debate inflation vs deflation. Hoarding cash or retiring debt is deflationary. The answer is right in front of you. Those who cannot hoard or pay debt default, but cannot take on more debt which equals deflation.
With Gold falling off a cliff , silver already hitting the side walk, oil plumetting, stock market sinking and real estate apocalypse is there anyone here to argue the inflation case anymore?
If there is a hidden bug bear of inflation concealed by ultra low velocity then I suppose it must stop at food and water because that seems to be the only thing that might pry loose a buck from someone's emaciated fingers if it continues. So perhaps the first sign of it will be a massive spike in basic commodities.
So it looks like paper in all its glory is king from dollars to.....
The Great Toilet Paper Shortage!
America's First Toilet Paper Shortage (http://home.nycap.rr.com/useless/toilet_paper/ - broken link)
The arguments I heard for "hyper-inflation" were fairly incoherent 1-2 years ago, but now they are getting pretty absurd. I notice that its changing from "hyper-inflation" to "deflation now, hyper-inflation around the corner" or something similar.
Its interesting that oil is now below $70/barrel. I didn't think it would go below $70 a few months ago.
The arguments I heard for "hyper-inflation" were fairly incoherent 1-2 years ago, but now they are getting pretty absurd. I notice that its changing from "hyper-inflation" to "deflation now, hyper-inflation around the corner" or something similar.
Its interesting that oil is now below $70/barrel. I didn't think it would go below $70 a few months ago.
Humanoid,
You can have both inflation and deflation at the same time. That's probably why you are confused! Look around. Houses and wages are down and food prices are up. Oil is low because demand has dropped.
You can have both inflation and deflation at the same time. That's probably why you are confused! Look around. Houses and wages are down and food prices are up. Oil is low because demand has dropped.
Hi Woof,
High prices are just that, it will cost you more. That does not imply inflation while other things are deflating. If M = 10 and Food=5 and Oil=5 and then M=10 Food=6 and Oil=4 its not inflation. Food demand is up relative to oil.
Inflation means growing money supply , not growing demand for a good. We are currently experiencing debt deflation.
Unfortunately I don't know if they are going to let it continue or start sending treasury checks to big spenders.
Humanoid,
You can have both inflation and deflation at the same time. That's probably why you are confused! Look around. Houses and wages are down and food prices are up. Oil is low because demand has dropped.
When I say "inflation" and "deflation" I'm talking about changes in the supply money/credit.
You seem to be talking about price increases/decreases. Someone just pointed out the distinction yet....you are still barking up this tree. Even during the depression (which was highly deflationary) some prices increased. The price increases were largely caused by tariffs.
You can have deflation while some prices are going up, just as you can have inflation with some prices going down. But when the supply of money/credit declines the typical effect is a drop in the aggregate cost of goods.
But, what is interesting (and why I made this post) is that pretty much every commodity is crashing right now! You seem to be repeating what you heard months ago and failed to look at what the commodity markets have been doing lately. Its a pretty interesting across the board crash (Again, look at the link in the initial post).
But, what is interesting (and why I made this post) is that pretty much every commodity is crashing right now! You seem to be repeating what you heard months ago and failed to look at what the commodity markets have been doing lately. Its a pretty interesting across the board crash (Again, look at the link in the initial post).
Are you looking at stock prices for commodities? That would be considered an asset-based deflation. Stocks and real estate are assets. Those are going down.
Are you looking at stock prices for commodities? That would be considered an asset-based deflation. Stocks and real estate are assets. Those are going down.
What in the world are you talking about? Why would one look at stock prices for commodities? It is apparent that you haven't taken the few minutes it takes to look at what the commodity markets are dong.
Regardless, I mistaken told you to look at the link in the initial post as I got this confused with another thread I created in which I posted a link to graphs of commodity futures. Here is the link:
As you can see, food prices are crashing. It will take a couple of months for the declines in the commodity markets to translate into lower costs at the grocery store though.
What in the world are you talking about? Why would one look at stock prices for commodities? It is apparent that you haven't taken the few minutes it takes to look at what the commodity markets are dong.
Regardless, I mistaken told you to look at the link in the initial post as I got this confused with another thread I created in which I posted a link to graphs of commodity futures. Here is the link:
As you can see, food prices are crashing. It will take a couple of months for the declines in the commodity markets to translate into lower costs at the grocery store though.
Humanoid,
Commodities were oversold and now they are correcting themselves. Take another look at the graphs. Nothing is crashing. I'm not sure where you draw that conclusion from. Thin air, I suppose!
Last edited by Woof Woof Woof!; 10-17-2008 at 09:57 PM..
Commodities were oversold and now they are correcting themselves. Take another look at the graphs. Nothing is crashing. I'm not sure where you draw that conclusion from. Thin air, I suppose!
Honestly, its a bit hard to take you seriously. Wheat is down 50%, corn 40%, Soybeans 47%, oil 51%, etc. If that isn't a crash....I don't know what is. The markets will continue to decline as the economy continues to unwind, they still have a bit to go before they are match their pre-bubble levels.
Oil has already dropped backed to prices seen in 2005~2006.
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