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Comments on Washingtons Blog: The Great Inflation Versus Deflation Debate





Updated: 2018-01-17T13:19:43.510-08:00

 



Why does this debate have to be either/or? Can th...

2009-06-30T19:46:37.656-07:00

Why does this debate have to be either/or? Can there not be BOTH inflation and deflation simultaneously? Case in point, has anyone here gone to the supermarket recently? Food prices are going up, not down. Oil and gas are slowly inching their way up. Sure, real estate and flat panel TVs are going down, but only because people are too strung out to buy anymore of that. Everyone has to eat, however, and with the global droughts slowly worsening every year, no matter how few or many dollars we have, it will all be chasing dwindling food with more mouths to feed.



Very smart, but this argument takes place in an un...

2009-06-21T01:46:45.928-07:00

Very smart, but this argument takes place in an unrealistic vacuum. We are not buying and selling to each other in a bubble. We are buying from foreigners and using their "vendor financing" to do it. As we produce more dollars, commodities and foreign goods cost more in dollar terms. So, yes, domestic production and domestic items (like real estate) have to fall as consumers pull back their spending, but a pull back in spending doesn't necessarily cause the cost of Chinese goods, for instance, to drop in price. Those goods are already about as low as they can go. In fact, despite how low they were, we still required Chinese lending to finance our consumption of Chinese goods. As that lending dries up, and as the Chinese allow their rates to float higher, the clothes and other items we purchase so cheaply will increase in price. As a result, consumers will see a decline in purchasing power. Those in service industries will need to raise prices, eventually creating domestic inflation as well.



A simple look at the definition of inflation gives...

2009-06-09T14:40:36.621-07:00

A simple look at the definition of inflation gives you the answer. "Too many dollars chasing too little goods"
Please tell me how that is going to happen in the US anytime soon. Job losses have been huge, and still happening, wages are falling , benefits are disappearing, and China is still cranking out junk. It's damn simple there will be no inflation anytime soon. Raise interest rates is the second dumbest thing I have heard this year, the first being calling for the busting of pension funds and wages by the economic elite.



I find that most economist either fail to realize ...

2009-06-09T13:19:05.153-07:00

I find that most economist either fail to realize or ignore, is the fact that we have an aging population that won't really spend in the future. Japan is a good example.
Add to that, all the people who have defaulted on their debt, do you give them credit again?With wages and housing prices still falling, you can't have inflation. History proves that.