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Deflation: A Story Told In Pictures at Trader’s Narrative




Deflation: A Story Told In Pictures


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Back in October of last year, I looked with awe on an economic tsunami that was about to hit us all and wondered if it would be deflation or inflation.

Today, the answer is much clearer. Despite the gargantuan amounts of money that the central banks have pumped into the world economy through their loose monetary policy and despite the equally unparalleled coordinated worldwide fiscal stimuli provided by government spending, the danger of deflation is very real.

Just take a look:

capex spending 2009 deflation

ppi finished goods 2009 deflation

nfib job openings 2009 deflation

nfib add inventory 2009 deflation

nfib raise prices 2009 deflation

nfib raise worker pay 2009 deflation

retail sales 2009 deflation

Here is a FREE 60 page eBook from Elliott Wave International about the dangers of deflation and how to position yourself both defensively and offensively to benefit.

The elite financial community labeled Prechter – the 1980s “Guru of the Decade” – an outcast, a man preoccupied with the concerns of “small children.” Experts from all schools of the economics profession said Prechter’s deflationary scenario was “utter nonsense,” and as likely to happen as “being eaten by piranhas.”

Yet … here it is. Since the real estate top in 2005, deflation has festered its way into almost all asset classes, ravaging the portfolios of millions. If you’ve been spared from deflation’s mighty jaws, you surely know someone who hasn’t.

deflation ebook EWI

Until today, most of the forecasts and advice in this still-prescient eBook have only been released to Prechter’s faithful subscribers. You will not find its entire contents in other books or from other sources. This is your FREE definitive Deflation Survival Guide.

Download your 60-page Deflation Survival Guide now

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3 Responses to “Deflation: A Story Told In Pictures”  

  1. 1 blues

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    I’ve been saying that for a year now… Credit bubble always end in deflation… just like japan, I would think this is fairly obvious from the beginning…

  2. 2 jg

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    If it is ‘deflation’, then why is gold up markedly over the same period of time?

    Do not confuse a slowing economy with deflation.

    You can have massive unemployment and a crumbling economy — which we will, as we progress from our current position early in this Greater Depression — along with skyrocketing prices.

    Inflation and deflation are currency events. As soon as the Chinese, Japanese, and sheikhs lose confidence in the dollar, dump their Treasuries, and flood the market with dollars as they try to buy real assets with their dollars, all heck will break loose.

    In Weimar Germany, there were many periods of quiet, followed by spurts of inflation, as folks kept, then lost, confidence in the mark.

    Inflation is at bay, now, but such could change overnight, literally.

  3. 3 Lou

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    You hear more about increases in the money supply (massive stimulus spending, bank credit) than you do about the decreases (housing bubble burst, equity market implosion). Something like $13 trillion has disappeared out of the economy due to loss of real estate value, retirement funds, and stock value. This decrease has ‘only’ been offset by a couple of trillion in stimulus spending and gov loans. You won’t see any kind of spectacular or long-term inflation when the net effect is a contraction in money supply.

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