Kunst

Deflation on the Ski Slopes?

Everyone keeps talking about deflation, like three months undoes decades of inflation. Housing was a bubble. Its price is coming down, just like tech stocks in 2001 and oil in the last six months. Those are just cyclical swings of the pendulum. Inflation has been inexorable for the last 60 years; the only question is how much. Right now, people are scared and are holding onto their money. Employment is the key. People won't spend money if they are afraid they don't have income coming in, or are afraid they won't. This is a temporary phenomenon. Once the economy stabilizes and then turns up again, it will be business as usual, maybe a little toned down due to a near-death experience. In the mean time, the world will be awash in US dollars. Tell me that isn't going to push prices up.