http://dailyreckoning.com/oil-and-water-deflation-forecasts-and-70-oil/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Sat, 20 Mar 2010 12:10:09 +0000 http://wordpress.org/?v=2.9.1 hourly 1 http://dailyreckoning.com/oil-and-water-deflation-forecasts-and-70-oil/#comment-12928 Sammy Thu, 25 Jun 2009 17:46:23 +0000 http://dailyreckoning.com/?p=16706#comment-12928 I think you are confusing the fact that China's and US's stimulus money goes into blowing short term speculative mini bubbles with inflation, that is expansion of money supply (Ms and Credit). Now over the last 1,5 years credit has been rapidly collapsing in USA and around the world. For example, according to the FED's stats in Q1 2009 private credit collapsed at annual rate of more than 1,8 Trillion, while FED's and Treasury's credit expanded at 1,4 Trillion. That is deflation in my book. Once the commodities mini bubbles burst pretty soon you will see another drop in prices for those. By the way CPI has been dropping at an ever increasing rate now. And the Government's CPI stats don't include decrease in house prices. Additionally, Treasury yields look toppy now and are sliding back down while junk bond yields have been rising recently. This is fortelling more recession, not recovery, and deflation. Best of luck. I think you are confusing the fact that China’s and US’s stimulus money goes into blowing short term speculative mini bubbles with inflation, that is expansion of money supply (Ms and Credit). Now over the last 1,5 years credit has been rapidly collapsing in USA and around the world. For example, according to the FED’s stats in Q1 2009 private credit collapsed at annual rate of more than 1,8 Trillion, while FED’s and Treasury’s credit expanded at 1,4 Trillion. That is deflation in my book. Once the commodities mini bubbles burst pretty soon you will see another drop in prices for those. By the way CPI has been dropping at an ever increasing rate now. And the Government’s CPI stats don’t include decrease in house prices. Additionally, Treasury yields look toppy now and are sliding back down while junk bond yields have been rising recently. This is fortelling more recession, not recovery, and deflation.
Best of luck.

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