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With the economy spinning deeper into recession, the country might suffer a dangerous bout of falling prices, or deflation, a Federal Reserve official warned Tuesday.
After years of punishing increases in the cost of energy, consumers are rejoicing these days at the sharp drop in prices at the pump. Not only that, but prices are dropping for clothing, transportation and housing, according to the government's . With money tight, the price declines are a welcome relief.
Deflation might sound like a good thing. Yet it can be even rougher on the economy than the more familiar phenomenon of inflation, because it's harder to get rid of.
Barrick shuts hedge book as world gold supply runs out - TelegraphThis is a double "oh-@!$%#" moment. We should see Gold shoot up and our dollars drop to nothing.
Economy is still shedding jobs and people are asking Obama to fix it. Folks, there is not much Obama can do about it. Government does not have a magic stick to swing and change the world. We have borrowed for 50 years and spent and inflated prices and salaries along with it.
Fed's Dudley Sees Risk of Declining Inflation as 'Problematic' Federal Reserve Bank of New York President William Dudley said that the risk of falling inflation is "problematic" for the economy and that interest rates should stay low for a while to ensure a "robust recovery."
This came up in a thread - and so I figured I'd make it easy to find - it's my long term monetary/economic forecast (Just like in the title!!! How 'bout that!)
Money figures show there's trouble ahead Private credit is contracting on both sides of the Atlantic. The M3 money data is flashing early warning signals of a deflation crisis next year in nearly half the world economy. Emergency schemes that have propped up spending are being withdrawn, gently or otherwise.
Does the world have the courage to deal with its debts?the author describes the looming catastrophe in finance/ currency in countries around the world; the threat of monetary deflation; some historical perspective.
What Would the United States Look Like Without the Federal Reserve?Since H.R. 1207 was introduced by Dr. Ron Paul in Congress this February, there has been a growing movement questions whether the Fed should continue to operate without more oversight and some question whether or not the Federal Reserve should continue to operate at all.
Cut Off From Savings?It's starting to seem like retirees and those saving for retirement can't catch a break.
Inflation is on Its WayThe noose is tightening. Keep only three months operating expenses in a bank, six months for businesses, and keep $5,000 or more at home in small bills for emergencies with your gold and silver coins. Let this be a lesson to you. They are preparing for currency controls.
Deflation Theory Is Lemon We Have All Been SoldThe banking industry, which has come to rely on inflation to make highly leveraged loans sustainable, also dislikes deflation. Likewise, it is bad for governments, which use inflation to reduce the value of their debts.
Updated: 07-Aug-09: I updated my research and put together this analysis. Research links are at the end. Highlights:
Meanderings On Inflation, Deflation, Misinformation & Tomorrow A great primer on how we got into this economic mess! Nice and easy to understand for the layman.
We are in the Midst of the Great Baby-Boomers Economic Stagnation of 2007-2017.But if the largest cohort of consumers cuts down on its spending and borrowing, what does it mean for aggregate spending and economic growth? It can only mean slower overall economic growth and some painful economic adjustments.
Others are finally starting to add the numbers together. I've looked past the TARP however. New update: 07/20/09
Yesterday I learned that the Government is stealing from the people. Several years ago I bought my daughter some I bonds and they had a stated "fixed" interest rate of 1%. It was my understanding that they would ALWAYS pay at least 1% - after all that is what a FIXED rate is.
Fresh Data Suggests Recession AbatingThe reports bolstered the argument that the economy's severe recession was close to hitting a bottom, with growth likely to return in the second half of the year. More Articles
Op-Ed Columnist Paul Krugman - The Big Inflation ScareSuddenly it seems as if everyone is talking about inflation. Stern opinion pieces warn that hyperinflation is just around the corner.
I just saw an article on MSNBC, worrying about falling prices. Of course, the article is then commented on by newsviners, wondering how is it possible.....Answer: Energy prices are much lower, this year than last.
U.S. Initial Jobless Claims Fall to Three-Month LowThe number of Americans filing claims for unemployment insurance unexpectedly fell last week to the lowest level in three months, a sign the worst of the job cuts may be over. More Articles
Falling Wage Syndrome Or How Deflation Hurts Us AllWages are falling all across America.
Project Syndicate The rate of inflation is now close to zero in the United States and several other major countries.
Jobless Claims Show Surprise Decline"The past few weeks' claims data are beginning to look increasingly like a peak," wrote Ian Shepherdson, economist at High Frequency Economics, in a research note. More Articles
Obama Has Missed His MomentBarack Obama has squandered his presidency. He had a fleeting moment to challenge the casino capitalism and financial recklessness of our economic and political elite.
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