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Not Seen A Deflation Thread For A While

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We have been in a deflationary depression since 1982, it's just that cheap, easy credit has masked it.

The easy availability of cheap credit has conveyed a considerable amount of price support - price support that will be progressively withdrawn as credit tightens.

Prices will fall, but the collapse of credit will cause purchasing power to fall faster than price, leading to the apparent paradox of nominally cheaper goods being less affordable in the future than nominally more expensive goods are today.

Moreover, there are likely to be substantial changes in relative prices between essentials and non-essentials. As a much larger percentage of a much smaller money supply will be chasing essentials such as food and energy, there will be relative price support for those items. In other words, while everything is becoming less affordable due to the collapse of purchasing power, essentials such a food and energy will be the least affordable of all, whatever the nominal price.

People commonly speak of unaffordable prices as a result of inflation, but do not realise that deflation can have the same effect, only much more abruptly.

Edited by JimDiGritz

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I stopped buying the value ranges of apple juice and orange juice when they went up (at all supermarkets at once, how strange) from 56p a litre to 62p a litre.

Anyway, ASDA have now REDUCED them from 62p to 61p.

UNARGURABEL EVIDENS of DEFLAYSHUN.

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Well, the FEDS are so worried about it they have taken action.

and printed billions to counter it.

this should mean an evening out of prices across the board so we wont notice.

Of course economies where there is no deflation, do notice...like Libya, Egypt...oil producers in general.

then we have inflationary consequences in our own economies...

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I told you. It's 'volaflation'.

Serial bubbles and busts as loose money drives up assets and commodities and speculators hitch a ride until real demand dries up and collapses each bubble under its own weight leading speculators to run for the exits.

That's why they find monetary policy and targeting inflation so difficult now. Everyone will come to realise this at some point mark my words.

Rinse and repeat until the average Westerner has the same wealth as a Chinaman.

This is exactly what I am seeing and expect, no hyper inflation or hyper deflation until they loose complete control. Why would they choose either of these outcomes? This leads to your Volaflation.

The DOW has been bid up sufficiently to take the next round of deleveraging.

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We have been in a deflationary depression since 1982, it's just that cheap, easy credit has masked it.

The easy availability of cheap credit has conveyed a considerable amount of price support - price support that will be progressively withdrawn as credit tightens.

Prices will fall, but the collapse of credit will cause purchasing power to fall faster than price, leading to the apparent paradox of nominally cheaper goods being less affordable in the future than nominally more expensive goods are today.

Moreover, there are likely to be substantial changes in relative prices between essentials and non-essentials. As a much larger percentage of a much smaller money supply will be chasing essentials such as food and energy, there will be relative price support for those items. In other words, while everything is becoming less affordable due to the collapse of purchasing power, essentials such a food and energy will be the least affordable of all, whatever the nominal price.

People commonly speak of unaffordable prices as a result of inflation, but do not realise that deflation can have the same effect, only much more abruptly.

I generally agree with this but put the date about ten years earlier when the US abandoned the Bretton Woods agreement. We should get full on deflation when the credit bubble pops or is deflated over a period; I believe this is likely to happen.

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I generally agree with this but put the date about ten years earlier when the US abandoned the Bretton Woods agreement. We should get full on deflation when the credit bubble pops or is deflated over a period; I believe this is likely to happen.

I'm with you and Jim on this. Said it a few times on this site, I even suspect its a deliberate ploy to fool everyone to prepare for inflation when deflation is around the corner. It gets savers to dip into their cash and invest in hard assets, encourages consumers to "buy now" as prices will soon be out of reach. Once most people are on this wagon the credit bubble will finally burst and the inflection point will be swift, "unexpected" and brutal.

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I'm with you and Jim on this. Said it a few times on this site, I even suspect its a deliberate ploy to fool everyone to prepare for inflation when deflation is around the corner. It gets savers to dip into their cash and invest in hard assets, encourages consumers to "buy now" as prices will soon be out of reach. Once most people are on this wagon the credit bubble will finally burst and the inflection point will be swift, "unexpected" and brutal.

My thoughts too.

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Well, the FEDS are so worried about it they have taken action.

and printed billions to counter it.

this should mean an evening out of prices across the board so we wont notice.

Of course economies where there is no deflation, do notice...like Libya, Egypt...oil producers in general.

then we have inflationary consequences in our own economies...

When the negative pay rises kick in, benifit cuts kick in, rent reductions kick in,

So inflation and deflation at the same time.

Because there has been a huge deflation in debt money, countered by a huge inflation of base money.

If only someone could think of a name to describe such a thing.

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So inflation and deflation at the same time.

Because there has been a huge deflation in debt money, countered by a huge inflation of base money.

If only someone could think of a name to describe such a thing.

no need for a name as there already is one....The Austrian BUST phase.

high order goods fall while low order goods rise....back to balance.

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  • 285 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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