Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

The Deflation Myth

Economics / Deflation Mar 15, 2009 - 06:55 PM GMT

By: Mike_Stathis

Economics Best Financial Markets Analysis ArticleThis is another myth I want to clear up. For some strange reason, economists, and those who actually give credence to what they say seem to think that a single period eighty years ago set a precedent cast in stone for what to expect from this depression. As a result, the masters of propaganda continue to insist that you cannot have a depression without deflation. Apparently, these “experts” have never heard of data points. You cannot expect to make credible conclusions based on one period. You need several periods at minimum in order to transpose similar conclusions.


These are the same geniuses that have attempted to compare apples to oranges when stating their very weak case that a depression is not here. It's currently not a full-blown depression, but it's the early stages. These are also the same savants that denied the presence of a recession all throughout 2008 because they were looking at manipulated economic data. No doubt, these “experts” will change their tune in a few years when even the manipulated economic data can no longer hide the truth. Americans will have wished for warning signs in advance, but they aren't going to get them if they listen to the mainstream media because they focus on interviewing the economists; you know, the Washington and Wall Street hacks.

So I'll be crystal clear. All of this talk of current deflation is bologna. When you see people writing about deflation, they're basing their conclusions on unrevealing data. Those who speak of deflation are only defining what the banks are doing. The banks are holding their cash not because they have to, but because they can. The big banks have been given a blank check from the Treasury so they can make as many loans as they want. The problem is that they want to avoid nationalization. The more money they “borrow” from the Fed and U.S. Treasury, the higher the chance they will be nationalized. This explains why there is deflation, as given ONLY by the money supply data. In short, it's not a real deflation. Looking at the money supply (even if we could trust the numbers) doesn't tell us much about the current levels of inflation or deflation because it's a lagging indicator. The best way to determine the level of deflation or inflation is to look at the relative price change of a basket of good, preferably basic necessities.

As well, these same “experts” will go to their grave insisting that it's absolutely impossible to have inflation during a depression. Wrong again. The fact is that we will have a depression characterized largely by inflation. I first made this forecast in my 2006 book, “ America 's Financial Apocalypse: How to Profit from the Next Great Depression.” Most of the public didn't have a chance to read my warnings because the mainstream media chose to censor me. But quite a few hedge fund managers patched into my research. And they've done exceptionally well.

Deflation might bear its head at a later stage as it has recently. But this depression will be characterized primarily by inflation. You might be thinking this doesn't make sense. If so, then you aren't familiar with inflation trends. We are going to see at minimum, inflation in basic goods and services, like oil, food, and healthcare. Combined with double-digit unemployment, a very high level of underemployment, muted wage growth will work in unison to squeeze consumers. Finally, 80 million baby boomers will have little disposable income remaining to fuel the economy. It will be a silent depression.

Why will it be silent? Because the daily events that have caused panic will come to an end in a few years. Meanwhile, the massive taxpayer-funded bailout and stimulus funds will kick in, making Americans think that a recovery is in place. But it will all be an illusion much like that created prior to 2007. It will be a much different depression than the first one. And you should expect it to be different. After all, America is very different, as is the rest of the world.

For real people like you and me, inflation is alive and well, although it's tapered off since the commodities correction. Ask yourself if food, healthcare, higher education and other expenses have gone down. I don't know where you live, but for me they sure haven't. And you shouldn't get too comfortable with $2 gas prices because by my forecasts, oil is headed much higher in a few years. That said, you should also know that I cannot see hyperinflation coming in our lifetime. We will have a period of very high inflation, perhaps worse than in the late ‘70s, but it won't be hyperinflation. 

Don't Bet on Hyperinflation!

The denials by economists and others is designed to keep you in the dark, hoping you'll gain confidence in the economy; hoping you'll go out and spend more of what you don't have to create more meaningless data. The only problem is that this economic apocalypse is not one based on lack of confidence so much as it is on fundamental problems denied for many years by politicians. It would be in the best interests of the nation to admit the full magnitude of the problems now, so people can take the necessary steps to shield themselves from further devastation. But that just isn't the way things are done in America .

I want to encourage all who seek the truth and valuable guidance to follow me to my new site www.avaresearch.com (coming in a few days). You won't see me pitching gold or investments to you like others. You will continue to receive nothing but unbiased top-tier insight, education and commentaries.

2

By Mike Stathis
mike@apexva.com

Copyright © 2009. All Rights Reserved. Mike Stathis.

Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.

The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.

Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher. These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.

Requests to the Publisher for permission or further information should be sent to info@apexva.com

Books Published
"America's Financial Apocalypse" (Condensed Version)  http://www.amazon.com/...

"Cashing in on the Real Estate Bubble"  http://www.amazon.com/...

"The Startup Company Bible for Entrepreneurs"   http://www.amazon.com...

Disclaimer: All investment commentaries and recommendations herein have been presented for educational purposes, are generic and not meant to serve as individual investment advice, and should not be taken as such. Readers should consult their registered financial representative to determine the suitability of all investment strategies discussed. Without a consideration of each investor's financial profile. The investment strategies herein do not apply to 401(k), IRA or any other tax-deferred retirement accounts due to the limitations of these investment vehicles.

Mike Stathis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules