We’re In A Contained Depression That May Last As Long As A Decade

Wednesday, August 25, 2010
By Paul Martin

Mike “Mish” Shedlock
BusinessInsider.com
Aug. 25, 2010

Kevin Feltes, an economist for the Jerome Levy Forecasting Center, solicited my opinion on a couple of their recent articles.

Levy comes down on the side of deflation, as do I. However, the devil is in the details, as always. I will go through one of their articles in a point-by-point fashion, stating where I agree and disagree with their analysis.

This is a long post. Please give it some time.

Please consider Widespread Fear of the Wrong Kind of Price Instability.

Levy:

It is not inflation but more disinflation and ultimately deflation that lie ahead in the 2010s.
Inflation worries remain a major part of the market backdrop, and the past year has brought new price stability concerns to investors. During that time, we have written about inflation fears, deflation risks, and the relationships between price trends and monetary policy, fiscal policy, Treasury debt levels, foreign debt holdings, and various other issues. We have argued that rising inflation will not be a threat in the coming years and that disinflation and some deflation are the real worries. Our position remains unchanged.

“Contained Depression”
Japan’s Finance Minister Threatens Yen Intervention to Halt “One-Sided Movement”
Another Atlas Shrugs – Small Business Owners Chime In
1. Why It Will Be Very Difficult for Inflation to Accelerate in the Next Few Years

The rest…HERE

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