Jump to content
House Price Crash Forum
Sign in to follow this  

The Business Online: Deflation Is Not About To Happen -- It's Already Here.

Recommended Posts

'Deflation is not about to happen -- it's already here':


So why is there no inflation? Doesn't this strike you as odd?

Could this, by any chance, be related to the fact that last year Alan Greenspan's Fed had to drop interest rates to the floor in a desperate bid to stave off deflation? You bet it is.

They have pumped up demand with the most inflationary interest rates since the early 1950s, yet inflation has remained meek and mild. But they haven't cured deflation. They have masked it. It's there, but they have completely taken away the effect.

The result, of course, is an ideal boom, with no inflation, and that's why my friend is so contented. But it's a complete illusion.

When this economic cycle turns down, and the demand for fuel, houses and commodities wanes, and the debt which has been incurred to finance it has to be repaid, there will be nothing left to disguise the deflation, because the excess production capacity will still be there.

Then there will be the whole downswing of the economic cycle to go through. That's the bear market which is coming. I still think it is going to be immensely destructive, globally.

Share this post

Link to post
Share on other sites

This is not good news for anyone. Deflation accross the economy REALLY SUCKS from an economic point of view. Eg: if houseprices crash thats good, if the cost of goods and services crash, thats good, but if my wages crash with them ... that really sucks, stabilising the gain in affordability with an equivalent loss in affordability, and mega unemployment. Nobody break out the champagne!

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.