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<p>[QUOTE=&quot;Juan Blanco, post: 1595868, member: 41665&quot;]Once-upon-a-time. That is not true anymore. Retail prices can remain high (or even advance) as global commodity prices (business levels) fall. Also, there can be global deflation (in USD$) even as a (Dollar-pegged) currency&#039;s retail prices increase exponentially. In nominal paper, things can get screwy. I think we&#039;ve been seeing that since 2000 or so; this supercycle collapse is far from over.</p><p><br /></p><p>As for Gold/PMs, the &#039;market price&#039; can drop while dealer&#039;s premiums RISE ... or they can decide not to sell (or go-out-of-business, etc.) instead. Imagine a scenario where &#039;low mkt price&#039; (COMEX PM Fix) co-exists with almost nothing available in coinshops or dwindling shows (except at <i>much higher </i>real prices.) See how many LCS have shuttered already: is that business niche healthy, growing? </p><p><br /></p><p>And why is the cost-of-living <i>rising </i>still, if we&#039;re trapped in a dis-&gt;deflationary cycle which began in 2000? In deflation, <i>overall business declines </i>and that seems to be what&#039;s happening around the USA. This economy is still in contraction - that also explains why companies still aren&#039;t hiring (or hire only a depressed wages) and &#039;healthy&#039; corporations remain parked in cash. So - for the 99% - why isn&#039;t cost-of-living automatically FALLING in this so-called &quot;deflationary environment&quot;? Reading inflationists and deflationists battle it out for years - no one seems to explain the conundrum ... nor do I pretend to understand it, either. </p><p><br /></p><p>I think today&#039;s &#039;problem with deflation&#039; is that it&#039;s an AGGREGATE measure based on purely paper assets (where <i>credit is money</i>, just as promissory paper is money &gt;&gt; M3+?) Nowadays, even fmr Fed Chrman Greenspan isn&#039;t sure how to define money (as he famously admitted before Congress.) So how &amp; why should we expect any prices to be strictly <i>rational </i>in such a fluid and ever-debasing system? The genii is out of the bottle, I fear... the Paper&#039;s failing and so these mixed signals make sense. </p><p><br /></p><p>&quot;The Fed is out of bullets&quot; means exactly THAT, to me. That&#039;s the Number One Reason to HOLD a monetary alternative/ real hard asset, not think of bullion as an &#039;investment.&#039; On the contrary, it&#039;s &#039;the Hedge Against&#039; the now-failing Paper-Game. Longer term, I&#039;m very bearish and - at the bottom - suppose <i>adjusted </i>home prices in most areas will probably have dropped another ~ -40% (with US stocks ~ -80% ; US bonds ~ -95%!) But the &#039;adjustment&#039; will be relative, buried in e-zeros. That&#039;s HUGELY &#039;deflationary&#039; for americans&#039; (All-Paper) wealth ... yet retail commodities (eg. food/gas) will still be higher too. Go figure, this is the conundrum of modern deflation. And doesn&#039;t it ALWAYS end in hyperinflation/ devaluation? </p><p><br /></p><p>Look at <i>most retail prices </i>in deflationary Japan, for example, since 1997. Did things (not rubbished paper assets, but actual <i>retail products</i>) get cheaper by the numbers there? </p><p>I-don&#039;t-think-so. It <u>won&#039;t</u> be different here either. The Great Reset - which MUST happen - will be brutal and painful for all.&nbsp; That&#039;s where <i>kicking-the-can-down-the-road </i>leads us.</p><p><br /></p><p>Just my two cents ... and yeah: I <u>do</u> hope I&#039;m very <i>very </i>wrong on how it plays out.[/QUOTE]</p><p><br /></p>

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