pochovilla

Reconsidering the Deflation Risk

Using purchasing power of a dollar consider this.
Home prices and paper/financial assets like Bank stock trend is deflation.
Consumer prices: gasoline, milk, grain based products health care, insurance real estate taxes trend is inflation acting as a tax on disposable income. Even if gas drops to $2.75/gal and oil goes to $80 per barrel the consumer will see less inflation but the Fed/Headlines will declare breaking the back of commodities. Is it so? Compared to what?
If you travel to Europe how much will the dollar buy?
This issue is one of semantics for the economists but a real problem for the consumer. But I would agree with the debt load the Economy is headed for Deflation where price increases to the consumer (inflation) acts as a tax on consumer spending.