By Tim McMahon, editor Consumer prices have risen at a meager 1.15% over the last 12 months-- despite massive stimulus and growing commitments from the U.S. government. So what's going on? Deflationary forces are strengthening. They are being spurred on by high unemployment rates creating an overwhelming need for consumers to liquidate their assets for cash. As this new economic phase is becoming a reality, expectations are compounding the effects as explained in recent commentary from the world's largest technical analysis firm. "The economy is moving into a critical new phase, an outright deflation in which 'prices fall because people expect falling prices.' Obviously, this … [Read more...]
Deflation: The Black Swan Has Been Spotted
By Nico Isaac Up until recently, the mainstream experts put the likelihood of deflation transpiring in the United States at whatever the current odds are of Mel Gibson finding a date; i.e. nill to none. Their catchphrase for the rare and unexpected nature of a deflationary event was "Black Swan." And as the following news items from 2008-2010 show, very few imagined this "bird" migrating onto the economic shore: Oct. 20, 2008: "Central banks of the world know how to stop deflation. You just print enough money." (Reuters) Jan. 19, 2009: "US Deflation Unlikely. The tremendous stimulus from the US administration... should prevent the recession from dragging on long enough for deflation … [Read more...]
20 Questions with Robert Prechter: Signs Point to Deflation
June 30, 2010 Signs point to Deflation By Elliott Wave International The following article is an excerpt from Elliott Wave International’s free report, 20 Questions With Deflationist Robert Prechter. It has been adapted from Prechter’s June 19 appearance on Jim Puplava’s Financial Sense Newshour. Jim Puplava: Bob, I want to pick up from last September. Since then we've had several quarters of positive economic growth. Asset classes rose substantially, CPI turned positive, gold has hit a new record, oil is close to $80 a barrel. I guess a lot of our listeners would like to know, have these events altered your views on deflation? … [Read more...]