You don't have to watch The Daily Show and its occasional snips of CNBC's poor prognostication to marvel at the economists' ability to confound us. You need only look at some of the headlines this week alone.
Let's take deflation and inflation, for example, and the occasional reports of what we should fear. We'll start today and work our way back.
Fed announcement spurs inflation concern. (Bloomberg)
So long, deflation (Globe and Mail)
Deflation: Too late to stop it when we experience it (American Enterprise Institute)
U.S. inflation rises (Reuters)
Lengthy deflation ahead (American Daily)
Deflation a threat to U.S. economy (Wall St. Journal)
Paul Krugman: U.S., Europe fear deflation risk (Forbes)
Pimco predicts inflation (Bloomberg)
Well, can't we just mash the inflation and deflation together and have them wash out? Then (to steal from FDR) the only thing to fear is fear itself.
Looks like we're at a 4-4 tie right now. We'll need to see what the economy does from the 3-point range in the next quarter and who can dominate the paint. (Sorry, I think my vaccine failed and I caught March Madness. I'm going to go lie down now.)
We aren't going to have inflation or deflation; we are going to have inflation AND deflation. Basic necessities, such as health care and food, will soar in price while all non-essentials will continue to deflate.
The rate of deflation of non-essentials will, of course, depend on the degree of inflation of essentials. The more health care, food and other essentials inflate, the more rapidly everything else
Houses, of course, will deflate even more rapidly
than they are deflating now because, in hard times, owning a house is a non-essential luxury.
A profound value change has taken place and no amount of manipulation of the money supply is going to alter the course of that value change.
There is only one thing that can save this society from experiencing this dramatic change in values. Find a radical way to radically lower healthcare costs in this country--- RADICALLY AND QUICKLY.