Deflation Doom

Off the microphone of RE

Follow us on Twitter @doomstead666
Friend us on Facebook

Snippet:

…What the CBs and Financial Pundits like Ambrose Evans-Pritchard are TERRIFIED by now is apparent DEFLATION through numerous of the micro economies throughout Eurotrashland. Prices are FALLING! Horrors! Even in SWEDEN prices are falling! This really gets nasty in the world of Real Estate, because falling prices put many McMansion “Owners” underwater, where they owe more than the box is worth on the market. Combine that with defaults and foreclosures (which actually are the cause of the falling prices) and banks get stuck with a lot of White Elephants they can’t sell.

To solve THAT problem, the Cbs start offering up lots of low interest money to the well connected to go buy the junk and keep the prices propped up, leading to Hedge Funds like Blackrock getting into the rental bizness, which generally is a nightmare to run….

For the rest, listen to the RANT!

RE

8
Leave a Reply

avatar
  Subscribe  
Notify of
Econman
Econman

The “Deflation is evil” propaganda is the stupidest conclusion in economics. When have people ever rioted & started a revolution because things became fucking cheaper? When have U ever known anyone to get mad at prices going down for food, goods, etc.

A trip to Jamaica now costs me $100? My money keeps buying more & more? Now I’m pissed off!

It’s about as logical as a population getting mad because criminals started giving out money & breaking into your house & fixing things.

overthecliff

Deflation is a make believe story.

There will be inflation if the CB`s print it and give it to the sheeple. They are riding a tiger and don`t know how to get off.

Experience
Experience

I think you make a number of valid points but DUDE!!! Your site has become home to a select group of mind wasting melon flower casserole bigots

Stucky

“The “Deflation is evil” propaganda is the stupidest conclusion in economics.” —- Econman

Inflation and deflation are extremes. The market likes stability.

It may be good for YOU if Stucky’s Spitzbuben cookies sell for half price …. not so good for ME. Not so good for you in the long run either … I might just stop making them.

If Stucky as a $10,000 credit card debt (I don’t) I’d rather pay it with inflationary dollars. Paying back debt with delationary dollars would be very bad for me …. especially on things like a mortgage.

Contracts are set in nominal terms …. NOT real terms. So when real prices change there are ALWAYS winners and losers. When prices go up, sellers and debtors are winners …. buyers and creditors are the losers. That’s easy to understand. The reverse happens with deflation …. the sellers and the debtors turn into losers.

llpoh
llpoh

In deflation scenario businesses can get fucked in a real hurry.

Bob
Bob

LIFE’S A BEACH, AND THEN YOU FRY!

Deflation is an economic low tide that will leave many gasping, flopping and dying on the beach of life. We are most likely in for something worse than the 1930’s, something less than TEOTWAWKI.

To summarize, we will probably go through a number of crash-and-bailout cycles before the ultimate ‘clog, seize up and collapse completely’ scenario — probably each one progressivey worse, but accompanied by some complacency based on previous outcomes. Bernanke was the only the first to attempt a delation-neutralizing monetary strategy, and it probably worked out for him as well as it ever will in the future.

Discover more from The Burning Platform

Subscribe now to keep reading and get access to the full archive.

Continue reading