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scepticofall
Member since May 2012
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Deflation vs. Hyperinflation

- Rick Ackerman -

Rick, you make some valid points. I don't pretend to know, but what about a third option, stagflation? I am of the understanding that you can have price inflation, (decreasing purchasing power of the currency), in certain commodities, but also reduced (deflating) value of other assets, such as real- estate, stocks, bonds. Note that this does not mean the nominal price of these assets will fall, it may actually "increase" as well, but at a slower rate than inflation. therefore, the value will decrease. In other words, food prices could increase 100%, and home prices increase 10%, but wages increase 15%. In this scenario, would that not mean the food cost has increased, and real estate costs (value) have decreased relative to wages?(not kept up with inflation). Of course, in such a scenario, interest rates would also be higher, putting more downward pressure on house prices. Back to you!

Commented 3768 days ago

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Beginning of the headline :Most of us understand that the audacious fraud that has sustained the U.S. economy and the global financial system can only end badly. But how? As far as we’re concerned, there are only two possibilities: deflation; or less likely, hyperinflation. In any event, it’s time for another go-round in the continuing debate. This issue seems to pop up in nearly every forum discussion no matter what the topic, so let’s use the holiday lull to focus on something that is almost certain to be more intere... Read More

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