Click to enlarge.
This is definitely not the 1970s, at least not yet. Note the difference in slopes between the two eras.
It is extremely similar to what Japan's been fighting for 20+ years though. As seen here, Japan has actually been experiencing "price stability" since the early 1990s. There's almost no deflation to speak of.
Source Data:
St. Louis Fed: CPI-U
Price stability in a system based on constant growth = BAD.
ReplyDeleteJapan has actually been experiencing "price stability" since the early 1990s. There's almost no deflation to speak of.
ReplyDeleteExactly! And over the past decade, Japan has had real GDP growth that isn't much different from the real growth in the U.S. If one adjusts for increases/decreases in household debt and population (which I have) I'd argue that Japan's households have experienced greater prosperity than American households over the past ten years.
Our eCONomic policy has and CONtinues to be nothing more than bank centric propaganda designed to rake-off bonuses by pushing CONsumption debt on households and the Government. eCONomists are set-up men for financial shams that enrich Wall St. and impoverish Main St.
Deflation is upon us. It wasn't disinflation/mild cpi deflation that crushed Japanese and American households. It was massively leveraged housing deflation that did them in.
Bernanke is criminal doing the bidding of banksters.
GYSC,
ReplyDelete"Price stability in a system based on constant growth = BAD."
In my opinion, price stability in a system designed to tax inflationary profits is bad... for government.
mab,
ReplyDelete"Deflation is upon us. It wasn't disinflation/mild cpi deflation that crushed Japanese and American households. It was massively leveraged housing deflation that did them in."
Some would argue that it is all behind us now. I am not one of those people!
In my opinion, price stability in a system designed to tax inflationary profits is bad... for government.
ReplyDeleteI guess we're lucky that's not our system. We tax wages and simple interest heavily. Profits are hardly taxed at all especially if one considers real estate profits and accounts for all the deductions and roll over gimmicks (1031 exchanges etc.). And capital gains are only taxed once (they grow tax deferred) at 15%. Private (in)equity and hedge fund "carried interest" is also taxes at only 15%.
Wall St. centric eCONomists and CONgressmen have turned every basic principal of eCONomic fairness on its head.
mab,
ReplyDeletemab,
Wall St. centric eCONomists and CONgressmen have turned every basic principal of eCONomic fairness on its head.
Surely the tax break I received in 2004 when I wanted to dump all my stocks and start loading up on government debt in earnest helped our country immensely though. Just picture all the jobs that were created by my hoarding of inflation protected government debt!
And let's not forget that stimulus check I received. I was half-tempted to simply frame it and put it on my wall as an homage to buried cash. I was too frugal though. It's been earning about 1% in an online savings account instead. Surely that money is creating jobs somewhere. Maybe. Possibly. Um, well, ...
I'm not exactly ruining your argument, am I?