Deflation

[vantexan]

Been seeing quite a few remarks about deflation as opposed to inflation on the 'net. The kind of thing Japan has been reeling from for 2 decades, but on a worldwide basis. Commodities are down across the board, China's economy is tanking. We may actually see the Dollar buy more here at home as prices drop. Hopefully not a huge crash, but the possibility is there. Apparently not great for the rich, not great for raises either. And once it starts there will be a spiraling down trend. Everything will get cheaper. As companies and governments look at macrotrends it makes me wonder if the reason so many shed their traditional pensions is because they foresaw this coming, with less revenue meaning they couldn't cover the pensions. Personally I hope it happens as my small pension will only go so far.

 

[slowdriver]

I agree things do seem to be trending towards deflation, I just wonder if it continues the downward spiral, how our government, specifically the federal reserve will respond to declining tax revenues as a result. Cash is definitely king, at least for now..

 

[bbsam]

Been seeing quite a few remarks about deflation as opposed to inflation on the 'net. The kind of thing Japan has been reeling from for 2 decades, but on a worldwide basis. Commodities are down across the board, China's economy is tanking. We may actually see the Dollar buy more here at home as prices drop. Hopefully not a huge crash, but the possibility is there. Apparently not great for the rich, not great for raises either. And once it starts there will be a spiraling down trend. Everything will get cheaper. As companies and governments look at macrotrends it makes me wonder if the reason so many shed their traditional pensions is because they foresaw this coming, with less revenue meaning they couldn't cover the pensions. Personally I hope it happens as my small pension will only go so far.

They shed the traditional pension because it increased their bottom line.

 

[Rhoderunner]

Oh good.....Thought this was about Tom Brady. Carry on .....

 

[bacha29]

All good points. Remember inflation occurs when the demand for goods and services exceeds the capacity to produce and provide them. Deflation occurs when the supply of goods and services far exceeds demand. In her news conference in late June Fed chairman Janet Yellen pointed to the fact that 70% of the U.S. economy is consumer based and she said that wages must go up or the recovery will stall out and head back toward recession and here it is 8 weeks after and the stock market is showing signs of it.

 

[MrFedEx]

All good points. Remember inflation occurs when the demand for goods and services exceeds the capacity to produce and provide them. Deflation occurs when the supply of goods and services far exceeds demand. In her news conference in late June Fed chairman Janet Yellen pointed to the fact that 70% of the U.S. economy is consumer based and she said that wages must go up or the recovery will stall out and head back toward recession and here it is 8 weeks after and the stock market is showing signs of it.

The Fed will probably keep interest rates unchanged, which should boost the stock market when they announce it. Frankly, I don't see how our economy has done so well (relatively) when wages have been stagnant for so long. It makes me wonder how many of those new cars and other big ticket items are financed for 5 or 6 years. More debt, and less savings.

 

[SmithBarney]

I'm definitely not doomsdayer, but I do believe the world and its economy have the potential to rapidly shift.
but consider looking into what is called a Shmita:
https://en.wikipedia.org/wiki/Shmita
Some consider this a Shmita year with a huge market correction/crash looming.

Whether you are religous or not, consider if it were true, you'd want to be prepared.
have cash, guns/ammo, food, water, gasoline saved for a rainy day. Hey if nothing happens great you have some extra stuff, if something does happen then you are prepared.

Consider reading(get it at your local library if you don't want to spend $ on it)
http://www.amazon.com/exec/obidos/ASIN/161638610X/stupfothtr0c-20
http://www.amazon.com/exec/obidos/ASIN/161638610X/stupfothtr0c-20
Now back to counting my ammo...j/k I can't count that high.

 

[vantexan]

All good points. Remember inflation occurs when the demand for goods and services exceeds the capacity to produce and provide them. Deflation occurs when the supply of goods and services far exceeds demand. In her news conference in late June Fed chairman Janet Yellen pointed to the fact that 70% of the U.S. economy is consumer based and she said that wages must go up or the recovery will stall out and head back toward recession and here it is 8 weeks after and the stock market is showing signs of it.

From what I'm reading the major catalyst for deflation in the U.S. will be the Baby Boom generation. As they retire they'll also downsize and spend less. Less demand combined with high production capacity will dampen prices. Japan is a textbook example with the oldest population in the world. Read the other day that adult diapers far outsell baby diapers there. The U.S. might lessen the effect with immigration, but there seems to be a lot of angry anti immigrant sentiment lately.

 

[Route 66]

The way I see it, if I ever found myself in a position to where I was actually digging in to my vast stockpile of guns and ammo - then it's already a lost cause for me anyway, so it'd be pointless to even do so. What battle would I possibly be "winning"?

And I'm saying this as a 2nd amendment-supporting gun owner.

 

[Stu_padassol]

You beat me to it Rhoderunner.. Well played

 

[overflowed]

The way I see it, if I ever found myself in a position to where I was actually digging in to my vast stockpile of guns and ammo - then it's already a lost cause for me anyway, so it'd be pointless to even do so. What battle would I possibly be "winning"?

And I'm saying this as a 2nd amendment-supporting gun owner.

Don't want it anymore? PM me I'll come pick it all up.

 

[SmithBarney]

The way I see it, if I ever found myself in a position to where I was actually digging in to my vast stockpile of guns and ammo - then it's already a lost cause for me anyway, so it'd be pointless to even do so. What battle would I possibly be "winning"?

And I'm saying this as a 2nd amendment-supporting gun owner.

Who said I was battling? I may have to hunt for food.
And I can't protect my family/home etc with one clip, then it's a lost cause anyway
but I doubt a horde of zombies will attack my home anyway.

 

[OUMick]

We are basically importing deflation. There are some rumors that China is basically starting a currency war with other Asian countries. With them devaluing their currency, the other countries will have to follow suit or be squeezed out of production. China has cashed in over 100B (with a B) in treasuries over the last couple of weeks. They did prop up their currency a bit but not much. Many believe they will continue to devalue their currency.

I'm not a tin-foil hat wearing person but there has been a lot of clamor about October over the last year or so. There are some very powerful people that eventually get what they want after they buy off the politicians. I would start loading up on ammo and food. (not crazy like the prepper shows) I would also buy some silver.

Google Ferfal and do a little reading from his blog. A lot of the things they went through seem to mirror where the US is now. He has some great insight on what he wished he had done.

 

[Route 66]

Who said I was battling? I may have to hunt for food.
And I can't protect my family/home etc with one clip, then it's a lost cause anyway
but I doubt a horde of zombies will attack my home anyway.

ahh, yes, I hear ya then

 

[Route 66]

Don't want it anymore? PM me I'll come pick it all up.

lol!, nah I don't actually have a vast arsenal - just being hypothetical there.

 

[bacha29]

All good points maybe the answer is found in what a man with 5th grade education once told me. " Buddy, the American economy runs on one thing and one thing only. The ability of poor people to get credit". I think that pretty much sums it all up.