Posted on 01/08/2015 11:11:38 AM PST by blam
Shane Ferro
January 8, 2015
Deflation is coming.
In a new note to clients, BNP Paribas's Laura Rosner writes that low oil prices could drag headline inflation in the US into negative territory in the first two quarters of 2015.
Rosner writes:
Under our new forecast, the quarterly y/y rate of headline inflation falls below zero in Q1 and Q2 2015 (-0.3% and -0.4%, respectively). We still expect the energy price shock to have only transitory effects (maximum impact in 2015) and limited pass through into core, though we will be re-evaluating that assumption over time. Our forecast assumes household and business inflation expectations remain reasonably well-anchored.
In the note, Rosner says core inflation, which strips out the more volatile costs of food and energy, is expected to be 1.8% and 1.7%, respectively, in the first two quarters of 2015. Rosner expects gas prices fell 11.2% in December.
(snip)
(Excerpt) Read more at businessinsider.com ...
The click-click sound of people texting 'lol' or 'rofl' to one another just wouldn't cut it.
I wish it would just blow up already...
This idiot writer is blaming oil.
It is and has been the uncontrolled printing of money(quantum easing)
that will cause deflation
That’s tough if you are in one of the older generations, with assets, but great for the younger generations since housing, etc. becomes more affordable.
Why didn’t he pay his monthly mortgage?
Well, yeah. I didn’t forget about that. I was simply looking at it from my point of view. I would think that I would come out of it relatively unscathed.
With that being said, I wouldn’t want to be in a deflationary spiral for too long.
On that topic, our neighbor has a rental where the renter failed to pay the rent for several months, trashed the house beyond repair (looks like a war zone) and left daring him to try to collect anything from her. He is screwed (upside down and the neighborhood is now filled with empty, trashed shells of houses) so he is abandoning the house and letting the bank just come after him. He knows the consequences.
“Why didn’t he pay his monthly mortgage?”
The house is on pilings. His wife became disabled. He needed to refinance to afford an elevator. Nobody would touch it as the house is worth less now than he owes. He had to move so his wife could get in and out of the house.
(He’s apparently been buried in this house since the crash.)
Oh, so, despite the headline, deflation is not predicted.
I only take people who can prove they’re employed and when I can speak with their present or recent landlord. But, yes, that’s the risk.
(Worst rental story.) A friend rented a house to a serial killer in Pittsfield, PA. I think the killer was named Luis Lent. One day the police raided the house and tore it apart. No bodies found. My friend was unable to rent or sell the house and he gave it back to the bank. He used to go over and help the guy work on his car. His wife said, “There’s something wrong with that guy. You should stay away.”
I will take deflation.
We took a trip to South Dakota a couple of years ago and while the kids swam I talked to a guy from Canada. He bought a house and worked somewhere near the oil sands in Alberta. His house value skyrocketed and he said there was hardly any unemployment in their town while we in the States were going through the nastiest part of the recession. I wonder how he is doing now.
To the average person,the way they figure inflation & deflation is pretty meaningless when they don’t take the prices of common things like food & energy into account. As I see it (& hopefully understand it)if there is deflation,then Soc. Sec. checks could decrease & interest on savings as well,while at the same time we pay more for energy & food. Sound right?
I think everything else has to come down with it, taxes, gov’t spending, wages, etc., for it to be effective. From what I understand the biggest deflation in this nation’s history was 1920 and they did mostly that, and the economy recovered very quickly. Like someone mentioned earlier what happens to mortgages? They stay the same so not sure how that was handled during that time period.
http://mises.org/library/forgotten-depression-1920
The reason I asked, is that I am a volunteer at a local credit union. I serve on the board of directors, and also serve on the credit committee. For about 15 years, I’ve reviewed loan applications, perused credit reports, asked questions about the loans, etc.
For the first couple of years, I sorta believed all the sob stories about “predatory lenders” that took advantage of poor slobs who didn’t know about “all that credit stuff,” and gave the applicants the benefit of the doubt.
I got disabused of that notion right quick.
About 80% of our delinquent loans are the result of plain old deadbeats. The other 20% is the result of folks who got laid off, illness, etc.
Just this morning, I was reviewing loans with the manager, and she told me we had a travel trailer that we had to repo, and needed to sell. The guy who bought it was a pipeline welder, but had been laid off. He made good money while working.
He’s now living in a shed, she said. I asked had he tried looking for interim work until the next pipeline job came along. Nope.
Now welders can find work anywhere, anytime, if they’re willing to work. I worked in construction for 30 years, so I know how the biz works.
He’s just another deadbeat.
I asked had he looked for
This guy kept the home until his wife couldn’t get up the stairs. So, I’m hoping he’s not a deadbeat. He certainly has a great job at the local university. His present house is at least an hour plus away from work. Mine is about 30 minutes away tops.
[ Y’know ...
INflation is bad
DEflation is bad
and
STAGflation is bad
Why do we even bother ? ]
In our Fiat based money system all of the above are only excuses for printing more Fiat money by those who own the printing presses.....
You, like most FReepers I suspect, are the type of person who the elites want and need to crush out of existence. They need people who are hyper consumers financed by debt up their eyeballs, living on a knife edge of fiscal calamity to finance their beemers, McMansions, etc.
And average income was $5000...
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