Charles Longfellow

Some Random Thoughts on Deflation

Well said! Whether gold or oil is the early harbinger is somewhat irrelevant. I agree that a move up by either, as the dollar does not, would be a divergent cue.
Spike and tease plays not considered.

Some Random Thoughts on Deflation

ok. Good sourcing. What does it say about inflation and the US dollar? Are you saying inflation of the USD is inevitable or not?

Some Random Thoughts on Deflation

I apologize. To be clear, I am suggesting that printing money may not create inflation until a balance is obtained. Imagine a traditional weight scale. On one side of the scale we put money, lots of it and increasing the amount in an attempt to raise the other side. The other side of the scale is the total of all credit that is no longer available. It that credit includes leveraged amounts, you will be able to keep printing money a long time before tip of the thing moves towards inflation.

Some Random Thoughts on Deflation

The money supply has been blamed as a factor in deflation as that money supply is reduced. However, other definitions of “deflation”, (wikipedia), refer to dual contributing factors: decrease in money supply, and decrease of credit. To what extent is decrease in availability of credit a contributing factor to deflation? If credit is considered beyond common types to include leveraged amounts, as per derivatives and other instruments for leverage, (often leveraging many times over by exotic investment vehicles), could this provide an answer as to why printing dollars has so far not stemmed deflation, and theoretically may not create inflation until the leveraged credit that is no longer available is offset by new dollars?