Pretzel Logic

This Recession Will Be Anything but Deep

There are a few things missing here in the inflation/deflation argument:

1) We are destroying credit, which is deflationary. Much of the money supply is credit and/or leverage. It is imaginary, not "real" money supply. As a result, money is being destroyed faster than it is being created.

2) We already HAD the rabid inflation people were predicting years ago. In case you missed it: oil was trading around $150 bbl, gold was north of $1000/oz., etc., ad infinitum.

3) We have never had inflation during a falling housing market.

4) We have passed a psychological threshold where banks, people, and businesses no longer view "easy credit" as desirable. Gov't can't reinflate that balloon right now, there are too many holes in it.

My personal opinion is that we get strong deflation for a while as the deleveraging and credit destruction continues. Once that unwinds fully, we will finally see inflation again.

What a Look Back at the Japanese Market Tells Us

I keep hearing that "the American consumer is tapped out." I have to say that this may be true for many, there are also many savers in this country. I sell large ticket remodeling (35K-100K typical) and you would be surprised how many middle-class Americans pay cash for these purchases. My experience in the real world tells me the statistics may seem more dire than the reality.

The Only Chart True Investors Need to See

Lmao! Looks like this crowd is a little too smart for buy-and-hold propaganda. That crap might work on John and Mary Lunchbucket trying to decide which mutual funds to stick in their 401K, but it obviously ain't workin' here. All I have to say is: look at the 1929 peak on your chart, and then look at where the market finally hits a higher high -- decades later. Sorry, but most of us aren't interested in waiting 20 or 30 years just to get "even" in devalued dollars.