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Consumers Buy Into Disinflation

Response to Hervert Hoover,

Inflation of prices of items (not produced in the country) without corresponding increase in *WAGES* of people is actually deflationary.

It's not hard to envision why if wages don't have inflation, price inflation ends up deflationary overall.

In the end, true inflationary spiral can happen only if WAGE is also inflating.

My problem is that with global arbitration of wages; and production capacity of GOODS and ENERGY is outside of the country; and outsourcing controlling wage increase domestically; the only way you can get into an inflationary spiral within the USA; is if USD complete depegs with the rest of the world and goes into a downward spiral.

However, that kind of inflation-attempt would happen with a high price: Cutoff of foreign goods and energy (too expensive); Cutoff of govt funding; Removal of USD as a reserve currency.

Because we will lose (reasonably priced) energy and foreign goods, whether the economy will end up collapsing completely, thereby skipping wage increase (to increase wage, you need to have functioning economy and jobs), or be able to go into an inflation period, is unclear.

This is the part that inflation scenario arguments that I cannot find. In pre-globalization days, it is possible to have Germany style chaos; In modern integrated era, WHAT IS THE MECHANISM to achieve overall wage gain?

Consumers Buy Into Disinflation

According to Wikipedia: Disinflation is a decrease in the rate of inflation.
Deflation is the opposite of inflation. Therefore, under the usual contemporary definition of inflation, 'deflation' means a decrease in the general price level.

Interesting thing this article pointed out: the rate of inflation according to the graph / analysis above, has gone down 7.7% since spring.

Consider that overall inflation was running previously at 5.4% rate, and 4.9% in this month; we don't really have a lot of leeway to give before the overall inflation is zero or negative.

If that happens, that will be the first even deflationary period since the 1930.