DEFLATION may be coming...
 

I had a debate with someone (maybe Mossed) on this board about whether Inflation or Deflation may be in store for us. I said then and I still feel that we are headed for deflation.

This is from the Fortune Magazine site today.

Deflation: the new threat

"NEW YORK (Fortune) -- Forget about inflation. The opposite threat - deflation - is what has policymakers sweating now.

Central banks across Europe slashed interest rates again Thursday. The Bank of England cut its policy rate to 3% from 4.5% - a cut three times as big as the market expected - while the European Central Bank trimmed its own rate by half a point, to 3.25%. The moves come a week after the Federal Reserve cut the Fed funds rate to 1%, touching the lows it set earlier this decade before the housing bubble took shape.

The cuts are remarkable because it was only four months ago that the ECB was raising interest rates to stem inflation fears tied to the surging prices of energy and food.

But since then, the deleveraging that has upended the financial sector has accelerated, and economic activity has slowed sharply. Policymakers have changed their tune accordingly, saying falling commodity prices will ease pressures for wage increases and support broad price stability."

Central bankers fear deflation - Nov. 6, 2008

Re: DEFLATION may be coming...
 

great, i'll be able to get a Big Mac for 3 cents...

Re: DEFLATION may be coming...
 

You'll get really fat!

Re: DEFLATION may be coming...
 

Is the worst fear of Deflation simply the mass loss of jobs due to loss of demand? Is it possible to defalte while maintaining pay and jobs? If so thats a good thing.

Could this simply be a correction in price of items and goods back to year 2000 lever before the spike?

Re: DEFLATION may be coming...
 

Considering the last time we experienced significant deflation was during the great depression, in my opinion, it's very bad "if" we get to that point.

You're right on the money with your assessment as to what would cause deflation. When enough people are unemployed especially on a world-wide level combined with the perception that we better save our money rather than buy that big-screen, then you're right, demand shrinks so far down it drives prices down further & further.

We should actually be hoping we don't see deflation happen.

Re: DEFLATION may be coming...
 

deflation first, then hyperinflation the likes of which we've never seen. I'm in the process of buying a house with cash, loading up on guns and ammo, and am looking to buy physical gold. I already own a ton of SLV. The times are sure to get very interesting, unfortunately.

Re: DEFLATION may be coming...
 

so we have a gentleman's bet. I say no inflation at all and you say hyper-inflation. How long do you think will take for this to start?

Re: DEFLATION may be coming...
 

how do i go about buying gold? or are you actually buying real gold and storing it in a safety deposit box or at your home?

Re: DEFLATION may be coming...
 

Jim Rogers:
YouTube - Jim Rogers Bloomberg 24 October 2008
Peter Schiff:
YouTube - Peter Schiff BLOOMBERG 28 Oct 2008 Part 1

Re: DEFLATION may be coming...
 

interesting comments on argiculture commodities and food.