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Deflationists

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Deflationists,

When if ever is the story going to play out???

I really don't see closure on this one. Deflationary forces are everywhere, structural and very much alive. CB 'printing' is enormous but you really have to wonder how long they will be able to carry on. I am assuming CBs will generate enough price inflation to reduce debt to income ratios without blowing up the house. But long term, it would take us straight back to the old deflationary environment (but from a higher price level) that requires massive credit creation to avoid price deflation. We seem to be stuck in this mess.

Edited by _w_

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I really don't see closure on this one. Deflationary forces are everywhere, structural and very much alive.

Not in my local supermarket they're not.

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Deflation.

June will show how the US Fed is thinking. At about the same time it should be clear that China is slowing down. The equity and commodity markets will begin to price in these trends in March 2011. Price of stuff will continue to rise, but not much past the end of the year.

Happy to accept payment for my guesses, but I have no idea which currency to denominate in paypal. I suppose you can't go wrong with natural gas derivatives.

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Deflation in credit and price of things bought with credit.

Inflation in Money and things bought with it.

This is messy, not least because credit masquerades as money most of the time.

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They have bailed out equity but at the end chain at peoples wages there is no bailout. Well in some yes but effectively the costs are pushed through the population as declining standard of living. Banks are looking at affordability in detail!

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As the entire economic system is based around perpetual growth projections which have to be met at all costs we are going to get massive inflation before deflation will take over when the ponzi system finally collapses.

Govts require ever greater tax revenues and inflation to them appears a very good way of ensuring they get the taxes they've already promised to spend. Peak tax is here.

However govts fail to see the paradox in that if they create inflation they actually need even more tax revenue than they actually projected to meet expenditure commitments. It's going to get very very messy especially as paper money loses trust and therefore its potential to store wealth.

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Not in my local supermarket they're not.

You're right about food and other commodities, they are attractive all the newly created CB money at that's making their prices go up. But with wages going down in real terms globally, manufactured goods and services are in structural deflation.

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You're right about food and other commodities, they are attractive all the newly created CB money at that's making their prices go up. But with wages going down in real terms globally, manufactured goods and services are in structural deflation.

Food is essential, you can't live without it.

However as people can't do without food if it keeps on going up disposal income which other sectors depend on will be reduced meaning lower sales/profits.

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This debate has gone on for a while although the current level of inflation in the UK poses a big question for those economists who told us that we would get mired in deflation. As well as the Bank of England which has pursued policies for deflation when we have the reverse. However an economist I follow thinks this in a more thoughtful analysis. Shaun Richards says.

If we link the rising price trend story with this we can see something for the UK to mull over too. You see Greek consumer price inflation is at 5.2% as of the latest figures for January,whilst her economic output is dropping at an annualised rate of 6.6%. I take intellectual satisfaction but no pleasure from pointing out that this reinforces an argument I have made for some time that you can have deflation (falling aggregate demand) and inflation at once.

http://t.co/FtxSTiB

We may well get something of a mixture......

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Many houses are getting cheaper every day, and you can buy a lot of chilled ready meals for the sorts of house price declines that are being posted here. Like Interestrateripoff says, inflation isn't about just one or two categories going up in price.

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Outside of the UK other industrialized nations are arguably in deflation. If you live in Los Angeles for example and the biggest cost is housing, which has fallen 50% in the last few years.. there has been a deflation from the perspective of a new home buyer.

What makes the UK situation the most precarious of the major industrialized areas is we now have inflation running at 4%.. it doesn't give the central bank much room to step in with monetizations in the event of a crisis. Our state still has some room left to borrow, with the national debt only about 65% the size of the GDP.

The US is in a better position, inflation is basically at a 50 year low, so they have all the room in the world left to monetize if needs be. Also the low rate of inflation in the EU is giving them room to monetize the bailouts of the PIGS.

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I really don't see closure on this one. Deflationary forces are everywhere, structural and very much alive. CB 'printing' is enormous but you really have to wonder how long they will be able to carry on. I am assuming CBs will generate enough price inflation to reduce debt to income ratios without blowing up the house. But long term, it would take us straight back to the old deflationary environment (but from a higher price level) that requires massive credit creation to avoid price deflation. We seem to be stuck in this mess.

Since when did price inflation have anything to do with wage inflation in a global economy

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The system IS deflating.

The Central banks are countering with printing.

hence the end result is inflation.....sadly, we, the end users of money, are not getting the benefit of the printing...we are getting the end benefit of lower value cash.

The end of inflation is a bust in full force....it will come...one way or another...if hyperinflated, the BUST will mean dead on the streets...no tanks required.

If the bust is allowed to happen....we will see the next boom within a year...and many busted banks...

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Deflation in credit and price of things bought with credit.

Inflation in Money and things bought with it.

This is messy, not least because credit masquerades as money most of the time.

The system IS deflating.

The Central banks are countering with printing.

hence the end result is inflation.....sadly, we, the end users of money, are not getting the benefit of the printing...we are getting the end benefit of lower value cash.

The end of inflation is a bust in full force....it will come...one way or another...if hyperinflated, the BUST will mean dead on the streets...no tanks required.

If the bust is allowed to happen....we will see the next boom within a year...and many busted banks...

As always, the Austrian Bust explanation is more accurate than the Biflation explanation.

But not everyone has read their Hayek as well as you have.

I would argue that the Biflation meme serves as a usefull heuristic to better understand the inflation/deflation confusion.

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As always, the Austrian Bust explanation is more accurate than the Biflation explanation.

But not everyone has read their Hayek as well as you have.

I would argue that the Biflation meme serves as a usefull heuristic to better understand the inflation/deflation confusion.

I like the Biflation meme, but it is fully explained by the Austrian theory as you rightly say...just about the only theory that explains that and stagflation...

the other theories have to resort to Supply and demand...hence we hear of shortages of commodities caused by this, that and the other, by the Keynesians and others.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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