Peter Boockvar Debunks Deflationistas
Good Tech Ticker clip featuring Peter Boockvar explaining why any deflation/disinflation will inevitably lead to more easing and ultimately inflation. I discussed this at length last year in Flaws in the Deflation Case.
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http://www.goldmansachs666.com/2010/03/goldman-sachs-links-and-news-weekend.html
That is a good point Adam, the central banks fear deflation a lot more than they hate inflation. And just the result of that imbalance results in inflation as they by definition over-react to deflationary pressures.
Though here’s a very good counterpoint: http://www.fundmymutualfund.com/2010/03/us-still-seems-more-apt-for-defaltion.html
TraderMark provides some analysis on a recent WSJ article that makes some valid points.
Thanks for the link, good stuff Shishir. I like Trader Mark’s stuff a lot, and deflation could be the risk near-term. But I think it will continue to serve as an excuse for central bankers to inflate/devalue/ease.
Eventually we’ll hit a point where inflation does start, but the economy will probably still suck. Will they stop easing? I don’t think so. Raising taxes and slashing spending would cause riots.
Who knows, this run could last another year, maybe 3-4? But those fundamentals always show their ugly face eventually…