Randy_H

Inflate, Deflate or Default

Hyperinflation is off the table. It does not occur to nations which maintain credible military force. Regardless, there are so many deflationary forces in the economy right now, I'm thinking that stagflation is our best outcome. Outside of energy and food, nearly everything is deflating rapidly, including incomes (thanks to wage efficiency theory's effect on displacement).

The US faces a very real liquidity trap scenario -- something I thought was relatively unlikely. But we're literally tracing Japan's every step in this mess, including now posting bad debts on the balance sheets at fictitious prices.