While I can't say I'm happy about the prospects for more deflation, I am happy about Bloomberg's recent interactive article U.S. Not Out of the Deflation Woods Just Yet (www.bloomberg.com, February 23, 2010).
Why am I happy? Because we're not out of the woods yet, in my opinion ... but I keep hearing people say we are out of the woods, and that inflation is imminent. In fact, here's what I said yesterday on my Defending Your Money radio show heard on South Florida's MoneyTalk radio (AM 740) and streamed live here on our website at 5 PM every weekday:
- It's about time the major financial media cut to the chase, reporting on Federal Reserve and banking statistics that present a direr outlook for deflation than analysis and economists are willing to admit. If you've heard me on the Defending Your Money show, you know I've been ready to scream out loud to get the word out about the underlying forces of deflation because...
- ...Consumers and Investors need objective information for accurate financial planning. The worst thing a consumer, business, or investor can do is plan for inflation when deflation is on the horizon. More on this in a moment.
- Key economic indicators are now in plain view for all to see. I've seen a parade of analysts, politicians, and economists drawing the too-simple conclusion that massive government stimulus and rescue plans have got to be inflationary. The indicators don't appear to support that argument.
- Investors should know how today's economy is not unlike five other such periods in the past. The Bloomberg article illuminates the underlying trends behind the current deflationary cycle that are similar in nature to five other deflationary collapses in the past five centuries. I've published twice in the past twelve years a special report on the boom and bust cycles of the past nearly 500 years, and about the alternating cycles of inflation and deflation. I wanted to prepare our clients and subscribers to our research about the potential for deflation, and I want to prepare you to take action to preserve your wealth.