Wednesday, October 31, 2012

Deflation or Inflation?

Lets talk Deflation.
Deflation is when things start costing less in the nation's currency.
A nice lunch in Tokyo now costs around $8 USD, but it was expensive 10 years back.

When deflation is in play, people and business hold off on buying things, because if you wait "it will only be cheaper".    Deflation kills the economy.    

Since the economy of the US is about 70% consumer driven, this type of thinking (deflationary expectations) is disastrous for the economy.  

Thus Bennie and the Jets (thinks dollars flying through a jet engine and being swatted down by the helo prop wash) would rather do anything rather than create the lost 3 decades that Japan is experiencing due to deflation --and other reasons such as aging of society, too much governmental and pension benefits that had been promised {sound familiar?}

So Bennie will print until they don't have to, or until they can't.   

I don't see the scenario in which they can no longer print, short of pitchforks at their doorsteps, and really I don't think the pharmaceutical-ed  up, dancing with the stars American sheeple are up to it.    Sorry folks...you ain't up to it.   Sure there are plenty little loud mouthed "revolutionaries" but in terms of real change, real protest, I really don't see it happening.    I don't see serious protest happening until people can't feed their families--not enough food stamps, and even then the anger will be misdirected. 

So Bennie will print.   And you better spend your money now...because things are only getting more expensive.   And because that money in the bank is getting no interest, no yield, so you might as well spend it.    And that is the plan, simple enough.   

Got gold?    It is ready to be slapped down to 1600 or make a run for 2000.   Target in 2 years is 3800 per troy ounce. 

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Insightful and Useful Comment!