Watch Out for Falling Prices; I Did

Townhall. com ^ | August 13, 2011 | Mike Shedlock

[Mr Ramsbotham]

It’s completely inscrutable, and so complicated that no one can really interpret what’s going on. For instance, the Chinese produce cheap goods. They send us the cheap goods and in return we give them green pieces of paper. They take the green pieces of paper and use them to buy our government debt, which we use to finance our deficit spending. We take the green pieces of paper that they gave us to buy government debt and use them to buy more cheap Chinese goods. And that’s just one minuscule part of the entire scenario.

[Salvation]

Interesting list with the charts. Most of it true.

[Cringing Negativism Network]

the Chinese produce cheap goods. They send us the cheap goods and in return we give them green pieces of paper. They take the green pieces of paper and use them to buy our government debt, build Aircraft Carriers.

Fixed it for you.

[puppypusher]

The only deflation I have observed is my 401K.The thing is almost none existent.

Other than that everything else is skyrocketing.

[ImaGraftedBranch]

Deflation is a decline in the speed of money. Inflation is an increase in the speed of money. Finally. I read, and waited, and read, and waited for someone to boil it down to the real issue at hand. Bravo.

[RED SOUTH]

It does not take an economist to figure it out. Boils down to this , the Government is too big and is spending way way too much. There is a socialist is in the WH and business and banks are scared so they are hoarding cash. Money and credit is tight because of this. The economy has stopped producing enough goods so the inflation in food and fuel is supply side. Fire Obama and replace him with small govt pro business republican , scale back regulation with a special target on the EPA , cut taxes , balance the budget with deep spending cuts and get out of the way and watch us roar back!

[Dr.Deth]

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[dennisw]

Mish is somewhat right ... he has been in the deflation camp for years. You can still have a deflation while commodities go up. I see laptop prices trending down and same for computer components such as memory.LED and LCD TVs are cheaper. Plasma TVs are really cheap now

[Kaslin]

And things are not going to get any better with that arrogant pos wanting to regulate the trucking companies

[Cap Huff]

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[webheart]

Boring!

[TheOldLady]

Click the Camera!

Just As Long As It's GREEN Cheese!

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[flaglady47]

“We are going to have both inflation AND deflation simultaneously. The macro equation is GDP= M*V which has two independent variables. That means you can’t be sure what you are going to get, inflation or deflationary credit collapse.”

I totally agree with you. We are getting both. It always cracks me up that the feds don’t count gas or food in their inflationary basket, when these are the two commodities that most blows a hole in anyone’s budget. As if that kind of inflation somehow doesn’t count. It sure as heck counts to most Americans who have to deal with it.

[nkycincinnatikid]

mark

[Sawdring]

I see laptop prices trending down and same for computer components such as memory.LED and LCD TVs are cheaper. Plasma TVs are really cheap now

Isn't that because of Moore's Law?

[dennisw]

Moore’s Law is true over the long term.... But within that trend you can see cycles of computer component prices firming up then dropping. Quaity laptops are cheaper than 12 months ago. The iPad fad is partly to blame.