CPI deflation coming to USA.

Based on the last three months CPI figures from the BLS, there is a real possibility that finally deflation is coming to USA.

     Expenditure                                                Compound
      Category              Changes from preceding month         annual     Un-
                                                                  rate    adjusted
                                                                 3-mos.   12-mos.
                      Nov.  Dec.  Jan.  Feb.  Mar.  Apr.  May    ended     ended
                      2008  2008  2009  2009  2009  2009  2009  May 2009  May 2009

 All items..........  -1.7   -.8    .3    .4   -.1    .0    .1       -.2      -1.3

This will increase average person’s purchasing power and redistirbute wealth fairly back into the hands of those who work and save responsibly. Let all the debtors be crushed by their speuclative leverage. Deflation is very good.  We are recommending to delay all purchases as long as possible to get the best price down the road.  No rush.  You can wait.

The wages have already fallen since the beginning of the year (though in truth, they have been falling in real terms for last few decades), the credit is collapsing and all of this is not the result of deflation, but the result of bubble blowing by the fed and reckless lending and spending of the last few decades, i.e. inflationary policies by the privately owned FED and the US Government. The MSM will tell you that deflation is to blame for the downward spiral, but if you think critically, you will see that deflation is the consequence of credit collapse, not its cause. Remember we had inflation for many years, and inflation is what caused this Second Great Depression, like the first one, not deflation.
Deflation is a natural phenomenon, when productivity increases and lowers output cost per unit, prices go down, but then the FED comes in an devalues the dollar more, so prices go up.

Savings need to be replenished and savers need to be rewarded not punished. Responsible behavior builds nations, reckless one destroys them. Reckless spending and lending and bubble blowing what got us into this mess in the first place, so recklessness cannot possibly be the solution.


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