Deflation/Inflation argument is so animated is for two reasons.

One is those who look at those terms simply as a monetary policy and not as CPI which is a lagging indicator.

Another is that one side looks at the U.S. as a closed system with our wages, our demand, our money velocity and our money multiplier as all working within our borders. The other side looks at the trillion in circulation around the world and global money velocity that is currently not too bad. But, it is raising food, raw materials and energy prices for us as well as others with declining value currencies.

My personal belief is that the U.S. is no longer in control of her destiny. We have put so many trillions in the hands of other nations that they, not us, control what we will experience with CPI. We can be in the midst of a depression and have bread cost us $100 a loaf if they decide to end using the dollar much more than they already are.

Remember, those non-dollar trade deals are mounting up. When we reach a tipping point there will no longer be a slow ending of use of the dollar. There will be a rush to spend them and get rid of them as fast as they can buying oil, copper, grains and other things they can stock pile.

Related Posts:

• Inflation is rising money supply which we have. Rising CPI is a symptom of inflation, not inflation.
• Tonight on Asian news they were calling for a correction in gold to reach $870 before taking off to $1,200 later this year or next.
• “The root cause of the current economic crisis is the failure to deal effectively with unaffordable loans and unnecessary foreclosures,”
• We are having deflation at the same time as inflation.
• China is making non-dollar trade deals around the world. Other nations too.

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