ozzy43

Inflation Expectations and the Price of Gold

Straw man argument. Analysts like Mish Shedlock make a compelling case for deflation - and it has nothing to do with looking at the CPI. If the author is willing to thoroughly address the arguments Shedlock makes, I'll be interested in reading it, but this post adds little to the debate.

How Long Before the Dollar Fails?

Paco - good article, as usual, but I have to take issue with this statement:

"we borrowed our way out of the Great Depression"

As someone who holds to the Austrian view, you must be familiar with Robert Higgs - suggest you review these two essays of his which demonstrate that it was NOT borrowing that led America out of GD1:

www.independent.org/ne...
www.independent.org/ne...

De-Leveraging Is Not Deflation

I think this is pretty simple. I agree with von Mises/Rothbard/Hayek/e... that an increase in money supply = inflation. Austrian economics are sound. However, bank loans are one component of the money supply. Using a simplifies but accurate model, if A + B = C, where A is printed (OK, electronically created) dollars and B is bank loans (including mortgages, credit card debt, multiplier effect, etc) and C is money supply. A is way up, but B is even further down, and future defaults will continue to drive B further down, even as A continues to increase.

So C is going down, on net. For now. That means deflation. The net money supply is shrinking, despite the Fed and fed actions. Until that trend slows, then stops, inflation will not be a worry. And trying to time that occurrence - a virtual impossibility IMHO - will probably be suicidal. Might be next quarter - or next year, or the next. Throughout, governmental manipulation will continue to make things difficult to understand and extrapolate.