Alstry's Deflation Perspective Catching On
Oct. 6 (Bloomberg) -- As Federal Reserve Chairman Ben S. Bernanke and his global colleagues fight the worst financial crisis since the 1930s, one danger is looming larger by the day: deflation.
With asset markets tumbling, commodity prices plunging the most in 50 years and banks keeping a tighter grip on credit, the ingredients for a sustained period of falling prices are coalescing. While inflation is still a concern for many policy makers only months after oil and food prices peaked, the risk is their patchwork of rescue and stimulus packages will fail, and prices will start to fall throughout the broader economy.
It ain't too hard folks....credit/debt is money......if you don't believe me just take a look at a dollar bill and see what it represents. For a while now I have quantified that debt is being destroyed much faster than credit is being created. Net Net money supply is decreasing and now prices are beginning to tumble.
First they tumbled in assets and now they are tumbling in commodities. Can this reverse?? Absolutely and very quickly. But for the meantime....Alstry's deflationary perspective is likely to gain some tailwinds.....and just when everyone is singing my song.....get ready for me to change course.