A Year of Deflation Coming Up? — DollarCollapse.com
Hmmmm. Sort of sounds like I’ve been saying for several years now. The growing imbalance between inflationary and deflationary forces will continue to put pressure on the Fed…and what will they do, do you think??? – HT
Some thoughts
To summarize, prices for grains and oil (and health insurance and college tuition) are way up but since wages are stagnant, higher prices for some things leave less disposable income for other things, which fall in price due to reduced demand. The increases and decreases tend to cancel out, resulting in low or no inflation, and maybe, if the process gathers momentum, deflation. That’s the story of the coming year.
Now the question is how governments will respond. If their goal is to inflate away their debts, then they will, very soon, open the monetary floodgates and give us the much-anticipated global coordinated quantitative easing. In which case by late 2013 we’ll be back in inflation mode, with soaring commodity prices, falling currencies and a general sense of things spinning out of control.