Deflation, Inflation, Stagflation maybe Biflation or Agflation (or both!)… all the ‘flations (as Bill Bonner puts it) are up for grabs though the real tussle appears to be over those who believe the general price level is in decline versus those expecting prices to abruptly start (or continue) to rise.
Whether the result is a dollar buying more things or dramatically less, these two groups are united by the fact they both see a pretty dire future and worse yet… they may simply be independently dwelling on two different aspects that will together materialize in sequence from this sorry economic period, one leading to the next.
How is the little guy supposed to navigate these troubled times? Should he move his nest egg to stocks, gold, assets like real estate or stay in cash? Should he borrow or save? Should he spend? What if he doesn’t even have a nest egg?
Despite this being the “Summer of Recovery” the typical American household is likely more than a bit unnerved, cautious and looking for a little guidance.
Unfortunately for them though, all the “experts” they had grown to rely on in the past (even if just just tangentially through the thick filter of the traditional media) like the Federal Reserve Chairman, various popular economists, business leaders and an ever shrinking list of credible political figures, haven’t a clue where the economy is going next all imposters having totally missed the severity of this period in the first place.
Yes… things are turning out to be quite the crap-shoot… Could this be an indication that the final day of reckoning is upon us?
Watching the government writhe in an epic display of populous-bile spewing partisan retching while academic and professional forecasters bury their heads in past trends presumably searching for clues from the 1930s and individual “investors” desperately seek out the next yield fix no matter the complexity of the “investment” or level of speculation has me thinking we are getting close.
At the very least these issues are receiving more popular attention as witnessed by yesterday’s On Point episode titled “Deflation Fears: U.S. as Japan?” featuring a lineup of David Wessel, Frederic Mishkin, David Resler and Dave Scott.
Notice that though the show is in itself fairly interesting, it was most revealing in exposing how poor the visibility is even for the supposed “experts”.
In times like these possibly its best to throw aside the rubes, quacks and charlatans of modernity and turn to the ancients for advice… What would Ben Franklin Say? Or the truly ancient Aesop?
Have the “great part of the miseries of mankind [been] brought upon them by false estimates they have made of the value of things”?
Have Americans lived as the Grasshopper and not the Ants? Do we deserve the Grasshopper’s fate?