Joy - here's where I get to show-off what a moron I am.  Oh well, here goes.

I keep hearing/reading about The Dangers of Deflation^TM - and that's why we need to prime, prime, prime the pump of the economy.  In theory, I get it - if you know something is going to be cheaper 6-months from now you're not going to buy that something for 6-months, only to put it off again when you realize it will be even cheaper if you wait longer.  For a consumer based economy such as ours, I understand that to be the so-called Death Spiral of prices, wages, jobs, etc.

Like I said, I get that much.

But here's what I don't get - granted it's only anecdotal, but all that presupposes that there is some actual, you know, delfation going on.  And frankly, outside of real estate (much of which would seem to be justified by the massive, and largely artificial, run-up in "home values" over the last decade or so) and automobiles I really am not seeing anything much in the way of prices dropping.

Not for food.  Nor for energy.  Not for, well, basically anything that is not real estate and autos.  And while those are obviously both a big, big deal at least the home-values part of the equation can easily be explained by the market simply readjusting to a stable equilibrium.

So, finally, here's the question:  What the heck am I missing?

Oh, and of course if the problem with our global economy is not one of liquidity and deflation (which could be solved, perhaps, by firing up the printing presses and pumping-out large quantities of Benjamins) but rather solvency, then isn't everything we've been doing - from TARP to Spendulus to the sequils of same - only going to bring us to Hell in a handbasket faster?

And is that a feature, rather than a bug, of Obamanomics?

And is this the Change We Were Waiting For?

Posted by: DocJ at 09:14 AM | Comments (2) | Add Comment
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