Reply to Thread

Message:: [QUOTE="NorthKorea, post: 2029249, member: 29643"]I'm simply confused on how we're in a deflationary period. When Obama took office in January 2009: Silver was trading at ~$11/oz. Currently, it's trading ~$15/oz.Gold was trading at ~$875/oz. Currently, it's trading ~$1150/oz.Oil was trading at ~$50/barrel. Currently, it's trading ~$68/barrel. The way I see it, commodity prices are about 40% higher than they were six years ago. 5.8% inflation annualized over the last six years. Given we were worried about a recession and extreme deflation, that's not so bad. I don't think we're facing headwind of deflation, so much as we're experiencing a correction due to the untangling of QE. We're fine. Unfortunately for non-US economies, they ended up taking on our losses in the form of housing inflation, but the US itself is fine. QE had the anticipated effect (inflation 50-100% above our 3.2% comfort zone), and the economy didn't collapse. The economy may show some degree of stagflation as we unwind, but the shock won't be strong enough to cause deflation. We're simply experiencing disinflation. Inflation is still positive, just not as much as we target for. We'll probably see another three years of inflation in the 1% range, until banks finally accept that interest rates must go up again. The sky isn't falling and more than it was when silver was supposedly going to $100.[/QUOTE]