This article from GoldSeek makes good points and explains quite clearly why US is going to stay in deflation much longer than most people and so called “economists” think, and why the privately owned FED is unable to reinflate the debt bubble.
There are winners and losers, just as there are from most economic developments. The important point is that the people who lose are more powerful than the people who gain. That might explain why we hear about the dangers of deflation, and not about its advantages. It still doesn’t make them right.
There is no threat from deflation. It may even be desirable if it encourages a balance between saving and consumption, and discourages governments and banks from taking on debt.
As the clowns in European fiancial elite circles are still trying to figure out whether or not they are in deflation, the big D is now solidly in charge of the region. As private credit is collapsing the Euro-zone governments and Central Banks are desperately trying to reinflate by pumping up the public debt and using the proceeds for spending. Yet the reflation is finding itself oddly overpowered by the deflationary wind blowing against it. Sooner or later this public debt bubble, and a huge one, will reach its maximum size and start letting the hot air out. When that happens, there will be nobody to guarantee the sovereign debts. The longer the deflation is delayed, the stronger it will be.
You cannot have an economic growth without natural population growth. We can’t seriously believe that by importing millions upon millions of culturally and economically incongruous third world laborers and their families European economy can somehow continue to grow. Those folks are not big spenders, and more often then not, they subtract from an economy more than they add due to their overwhelming propensity to depend on public assistance.
The brainiacs at Financial Times are making their case for more Quantitative Easing (QE) by the Bank of England to stave off deflation in the UK. Somehow the geniuses of economic science in once Great Britain firmly equate the amount of money in an economy with the level of economic activity and growth. It seems now a certain thing that the only thing that will educate them is relentless deflation that will either overpower them or force them on a path that will lead to a colossal and spectacular blow up in their failed policies of pumping up an economy with money when all it needs is to be left alone and allow the unsustainable asset prices and levels of debt to deflate. This is a good example of what people can do when they don’t want to understand the nature of money and its function in the economy. The money is a medium of exchange, and not a good that you can produce and induce demand for it. If nobody is willing to consume and has nothing to exchange, then the only thing that people will do with money is do nothing, so no economic activity will result in pumping more medium of exchange into the economy.
