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Inflation or deflation??

  1. nickoo

    1,816 Posts.

    This is how i see the inflation/deflation debate:

    Deflation drivers:
    - an shrinking economy with weak consumer demand
    - falling asset prices, leading to debt defaults, and a contraction in the money supply

    Inflation Drivers:
    - the fed importing new high tech TURBO printing presses to print more USD... the way to save the American debtors is to cause high inflation- which will lead to asset inflation.
    - a falling USD leading to higher import prices.

    Which will win out??

    The most likely scenario is a slight uptick in inflation, followed by deflation.

    I think the forces of asset prices falling is all too powerful for the fed to handle- Japan couldn't handle it.

    Deflation will wreck havock on the US economy- the deflation debt trap is the most powerful force in economics.

    The more leveraged a economy, the more potent the force.

    The falling USD is likely to mean that America will slowly export their deflation globally... if this occurs, we're all fuc*ed!

    Can the fed print fast enough??

    I don't think so!

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