Erick Tippett

Gary Shilling Continues to See Deflation on the Horizon

Many people easily are wearied by this endless deflation-inflation
debate! If one chooses to limit the definition of these two terms to
the classical ones according to Webster ("Inflation is an increase
in the volume of money and credit relative to available goods."......
"Deflation is a contraction in the volume of money and credit relative
to availble goods.") inflation is certainly on the horizon as the FED's balance sheet has skyrocked since last fall. However, all this deleveraging (because of toxic debt and the hesitancy of banks to lend as credit remains basically unavailable to all but a few) has
created a kind of "deflation" not in the classical sense of the word and has been in existence for some time now. All the printing presses and all the kings men can never put humpty-dumpty back together again, unless the bottomless pit can be filled. But don't hold your breath; for that is not going to happen anytime soon!

EDT
Chicago, Illinois