Elliott

The Inflation / Deflation Forces Battles On

Urban myth: the Fed is printing money like crazy. Not true. Go to FRED, the Fed's database, and look at a chart for M2. The total dollars in circulation in 2009 has leveled off after climbing in previous years. Government debt is increasing but total dollars in circulation is not... with high unemployment, there are fewer actual dollars chasing goods. That's why the inflation numbers are so low. With pay cuts, lack of jobs, huge housing price cuts, credit card contraction, etc., deflation is dominant right now. You can't have sustained inflation with a 10% unemployment rate... not enough buyers of goods to push up prices.