Aug

13

The flag of ballyhoo deflationA respectful question to the Chair, in view of his tenet of ballyhoo deflation–can it be that this supra monied propped economy soaked in debt has no chance of deflation? Riding the surfable wave of inflation has been the way to go through the general market lift but is it now time to begin worrying about something worse than simple inflation? With the countable Federal and State growing deficits, economic structural destruction in terms of jobs, production, GDP growth, et al. and the printing of massive QE money through Fed activities and Congressional acts the chances of a deflation seem remote.

Is it bearish to see these structural facts and thereby decide the economy may not recover for some time? And if the market continues on then it is a simple inflationary hedge that is better than traditional dollars that are cheapened daily. When one stands on the beach, sand is cheap. How do you square markets and market behavior when the water that they float upon being money that is rotting–and that rot is now visible?

I am interested in how you can have neutral, steady as you go market outlooks that have roots in economic realities when those realities are increasingly toxic bearish? I know markets move no matter the wind. But are you concerned about a total change in market reality? Of course I am not privy to your thoughts not shared here, and I know you have a total grasp of the players, rules, cheats. etc. These are the actors and factors we daily engage; is there a time when you anticipate change in conditions that disturb the market fabric to such a degree that a warning ever needs to be raised?

Is it time to bring the deflation flag down and raise the flag of ballyhoo to normal economic arguments? Or simply add a ballyhoo flag to the masticated economic reporting numbers game that we all seem to live under the fear of? If a Volcker-like turn in monetary policy happens in the future then of course we can return to status quo. But the present time seems to me to be quite an anomalous one.


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search