Monetary Backlash: Not Just “Inflation Versus Deflation”
…We’ve Got “MixedFlation” and “ExportFlation”
by Washington’s Blog
January 7, 2011
Many people have made persuasive arguments for inflation.
See, for example, my roundup from 2009, and Gonzolo Lira’s recent essay arguing that there is no political will to raise interest rates, and so commodities have become the safe haven investment (replacing bonds).
Many others have made persuasive arguments for deflation.
See, for example, my post from 2009, and Charles Hugh Smith’s recent essay arguing that mild deflation is good for the powers-that-be, and so they will make it happen (part II).
But perhaps debates about inflation and deflation paint with too broad a brush, or too narrow a focus …
Too broad a brush because the economy is not a monolith … different asset classes can move in different directions at the same time.
Too narrow a focus because you can’t analyze what’s happening in the U.S. in a vacuum in a highly global economy.