Shhhhh...Evidence of Deflation Mounts

[Yavin4]

But we dare not call it that because only massive government intervention in the economy and direct hiring of surplus labor can fight it.

Case in point:

Read this article on cnnfn today:

http://money.cnn.com/2010/09/17/news/economy/cpi_inflation/index.htm

See how the author is hemming and hawing about not calling this deflation. Check out this quote:

"We don't have a whole lot of inflation right now, and the economy seems to be losing momentum. But when you look at the numbers, what we see is low rates of inflation, no actual deflation," he said.

Ha! This is what you have to do in these times. You have to read through the bullshit to get at the truth like in the last decade when these geniuses said that there was no housing bubble.

Bottom line is this, the U.S. consumer is tapped out. They're not buying because they have no money. The ones who are working are paying off bills and saving like mad because more layoffs are coming. The impending election means that those on extended UE benefits will see their benefits cut off which means even less consumer spending.

IOW, media, esp. the financial media, have a pre-defined narrative, and any data that contradicts their pre-defined narrative gets downplayed or dismissed out of hand. Only Krugman will give you the straight dope on the economy.

[thereismore]

1. I heard (Krugman) that inflation does not have to become negative in order for us to be fucked.

It just needs to drop below a certain small positive number. Are we there yet?

[Yavin4]

2. Except for Energy and Food Prices, Yes, We're There

My worry is that extended UE benefits will be cut off when the Repubs take control of congress. Once that happens, you will literally plunge millions of Americans into the economic abyss. They will have absolutely NOTHING. Thus, creating even more deflation.

[n2doc]

except health care costs continue to climb

And gas prices aren't declining. And I don't see a big drop in food prices either. About the only thing I see deflating are house prices and wages. So for the average person, income is declining but costs go up.

[HiFructosePronSyrup]

3. Low rates of inflation are mounting evidence of deflation?

Huh.

[Yavin4]

4. Yes. It Does.

You need a moderate pace of inflation in order to sustain an economy. Flat prices inevitably leads to still lower prices as the only way to make a sale is to cut your price.

[xchrom]

5. recommend