Inflation or deflation? Chris Martenson: “Should be massive, self-reinforcing deflation, but it isn’t”

Home > Economics

Inflation or deflation? Chris Martenson: “Should be massive, self-reinforcing deflation, but it isn’t”

Tuesday, December 1st, 2009 | Economics |

One of the themes that I have been strongly promoting in my enrolled member area is the idea that most of what we are seeing in the financial world these days is more of a reflection of the perverse influence of a liquidity flood than anything meaningful. Watching how the markets were instantly recovered from the Dubai Debacle on Friday and today (Monday), and seeing gold and stocks and bonds all floating along despite the crisis is just further confirmation for the idea that the world’s liquidity pumps are set to “maximum power.”

I am truly amazed at what I am seeing out there in the markets these days. I also understand and share the frustration of the many analysts who know what “should” be happening but is not.

What should be happening is massive, self-reinforcing deflation caused by debt destruction and resulting from the housing bust and retreat of consumer borrowing.

These are harrowing figures:

Previously - Inflation or deflation? Jesse’s Cafe Americain says “selective inflation”

Tags: inflation