“Wake up, people! Your politicians have no intention of heading this off.”

Saturday, June 5, 2010
By Paul Martin

Worse than a Depression

By Monty Pelerin
AmericanThinker.com

As the economic crisis approaches the two-year point, it is apparent that “this time is different.” Few analysts believe that we are going to recover from this Great Recession in a fashion that resembles prior recoveries. Most argue about how long it might run (Japan’s recovery is now two decades old), and whether inflation or deflation results. Two years into the problem, these issues are still unclear.

It is understandable why the duration of the recovery might be moot. Less clear is why economists cannot agree as to whether there will be deflation or inflation. After all, these outcomes are polar opposites of one another and critical knowledge:

“I believe that getting the inflation/deflation story right is the single-most important investment decision that needs to be made. It will determine the investment outcome of portfolios over the next decade.”
– Jim Puplava, FinancialSenseOnline, July 24, 2009

Inflation and deflation proponents have intelligent, reasoned arguments. Both have some representatives that were not “surprised” by the events of 2008. How is it possible that intelligent people can forecast such opposite outcomes? The differences, in my opinion, arise from two primary sources:

•1. The schools of economics themselves
•2. The time horizon

The Rest…HERE

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