But what about oil, energy and food prices, and metals? Gasoline and food hardly looks like deflation rising with demand dropping.
“Deflation” is how the markets punish surplusses. We don’t have surplusses in everything, particularly oil and food, however.
But the world has too many houses. Too many factories. Too many shopping malls. Too many cargo ships. Too many airlines.
Where there are surplusses, expect falling prices. Like salaries. See, we have too many jobs worldwide compared to demand.
According to Harry S Dent, there will be a commodities bubble - the last to pop before the depression.
But the world has too many houses. Too many factories. Too many shopping malls. Too many cargo ships. Too many airlines.
Where there are surplusses, expect falling prices. Like salaries. See, we have too many jobs worldwide compared to demand.
I would also tend to (like to tend to?) think we would see an initial deflationary cycle first. If that winds up being the case at all, it is highly likely to be temporary for a number of reasons.
Above are only a few reasons. Being that Southack is probably bored from reading all of my mini-novels to him, so I won't elaborate any further. Suffice to say, if we see deflation at all, it's likely to be short lived.
Right now business and industry is being savaged and has been for the past year or two, but generally speaking, can any of us really say we've seen deflation? It's great time to buy a house, and a somewhat okay time to buy a car, but on a macro level, prices are not coming down across the board - in fact they're going up. We should be seeing deflation now if the rule that says commercial and industrial slowdown = deflation were hard and fast.
I know from corresponding with you (Southack) that the following is not what you contend, some will say that inflation only happens if the economy heats up, and they will also say that the converse is true, the economy slowing down will always bring deflation.
Logically and historically speaking, neither is necessarily true. An overheated economy is only one of many factors that may cause inflation. Inflation can happen in a lousy economic environment. Respectively, a hobbled economy doesn't necessarily cause deflation. I point to Zimbabwe or the Wiemer Republic as only two examples.
Inflation in everything we need; deflation is everything we don’t.