As many readers know, I read as much as I can with the time I have. The economic crisis we have endured is not over and I feel strongly that we are in the grips of deflation even though our government and Federal Reserve would like you to believe we are on the back end of a recession.
Michael Shedlock or "MISH" is one blog I read almost every day and I happen to agree with him on his ideas of inflation and deflation and what we're in. In a recent post, I feel like he knocks the cover off the ball with a lengthy piece that describes what these words mean in the real world and where we're at right now.
Please take a few moments to read it!
http://globaleconomicanalysis.blogspot.com/2009/11/what-is-inflation-and-how-does-one.html
Oh yes, and let me add a link to this post by Karl Denniger. - Click here and look at the performance of the USD and the S&P500. Absolutely inversely correlated. When the dollar stops going down, watch out. Until the dollar stops going down, everything else will melt up as we've been saying.
http://www.market-ticker.org/archives/1611-FedSpeak-Translation-There-Is-No-Recovery.html
Goatmug
Tuesday, November 10, 2009
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Hell yeah, deflation.
ReplyDeleteMish is the only one out there who seems to have a clue to what's coming. And I'm not sure he sees how bad it it really is.
The problem is... (drumroll) People confuse CURRENCY with CREDIT.
If we were printing currency via the treasury, sure we'd have inflation.
But we aren't... We're issuing DEBT. Which has to be paid, with interest. Create too much debt, and it 'runs away with you.
And if that credit isn't out circulating creating 'stimulus', it's just going to make for a bigger crash.
I give it one and a half, two years on the outside before we have to flush the global credit 'currency' debt based system.