Posted on 07/01/2007 9:44:31 PM PDT by bruinbirdman
Its the panic of 1837 all over again.
The Depression was a market correction. A free market is supposed to have expansions and corrections, and the futher the overextension, the more severe the correction.
And deflation used to be a component of the American system until the Depression, because one thing the New Deal did was eliminate that. Our econony has been strictly inflationary for nearly a century now. At some point, it’s going to fall back in on us. The reason we saw stagflation in the 70’s is because at that time, the economy was ready for a deflation, but a deflation couldn’t happen, so instead, growth stagnated while inflation kept shooting up.
Very much aggravated by the collapse in the money supply.
A free market is supposed to have expansions and corrections
And that's what we have, expansions and corrections.
And deflation used to be a component of the American system until the Depression
And thank goodness we've been able to eliminate deflation.
Our econony has been strictly inflationary for nearly a century now.
Yup.
At some point, it’s going to fall back in on us.
Why? Deflation never needs to occur.
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