Deflation is the Current Reality

[Rickson9]

Note: Deflation = -ve Inflation

If one anticipate hyper-inflation in the future, the prudent course of action would be to take on a lot of debt. Individuals who took out million dollar loans to purchase homes in Vancouver and Toronto will be rewarded with the onset of hyper-inflation. The nominal value of the debt won't change but the dollars that they're using to pay off the debt will. Soon, individuals with million dollar mortgages and loans will be paying off their debt with $100,000 bills. Hyper-inflation will make today's real estate buyers look like (very rich) geniuses.

If one anticipates deflation, then cash and long-bonds will be king.

What Inflation and Deflation looks like:
http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=13550358&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0

Canada in deflation:
http://www.cbc.ca/money/story/2009/09/17/canada-inflation017.html

U.S. in deflation:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEHQiqgK1vdQ

Japan in deflation:
http://ibtimes.com.au/articles/20090930/japan-sees-deflation-deepen.htm

Deflation taking root in global economies:
http://www.theglobeandmail.com/report-on-business/crash-and-recovery/deflation-taking-root-in-global-economies/article1306056/

Europe falling from inflation to deflation:
http://news.bbc.co.uk/2/hi/business/8282321.stm

[trent]

Hyper-inflation will make today's real estate buyers look like (very rich) geniuses.


This is only if they can survivce rapidly rising interest rates. The truth is that 95% of house buyers in the last 3-4 years will not be able to deal with a modest increase of lets say 2-3% in mortgage rates. Or maybe you think we can have a hyper-inflation and super-low interest rates we have now :)?

[Rickson9]

This is only if they can survivce rapidly rising interest rates. The truth is that 95% of house buyers in the last 3-4 years will not be able to deal with a modest increase of lets say 2-3% in mortgage rates. Or maybe you think we can have a hyper-inflation and super-low interest rates we have now :)?

Um, inflation and interest rates aren't correlated despite common belief. Unless you would like to link a source that shows the correlation of inflation and interest rates.

Long rates are set in the bond market, and at the moment, long rates are low, if not falling.

Short rates, such as the prime rate, which follows Mark Carney's setting of the BoC's overnight rate, are not rising either. In fact, Mr. Carney has avoided all talk about raising short rates.

In any case, if hyper-inflation comes, home buyers with million dollar mortgages will make out like bandits. If I was more intelligent and knew that hyper-inflation was coming, I would go out and get a million dollar loan...alas...

http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=13550358&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0

Current reality? Deflation. Tomorrow? Nobody knows.

[Canadian]

I agree that we'll have deflation for the next few months, but after that I expect inflation to pickup speed quickly.

[trent]

I agree that we'll have deflation for the next few months, but after that I expect inflation to pickup speed quickly.

Where do you see the deflation exactly? Real estate, stock markets, oil, gold are all sharply up.

[Rickson9]

Where do you see the deflation exactly?

I see deflation in the -ve inflation numbers released by the aforementioned countries in the first post.

I also see deflation here:

CPI from Stats. Can.:

September 2009 -0.9
August 2009 -0.8
July 2009 -0.9
June 2009 -0.3

http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=16089999&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0

Gold not up due to inflation concerns, but credit crunch:
http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=16101303&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0

Inflation rate stayed "well below zero" for the fourth consecutive month in Canada:
http://www.google.com/hostednews/canadianpress/article/ALeqM5izG5r2MzsizeGHEdc6mrYP526bug
http://www.inews880.com/Channels/Reg/LocalNews/story.aspx?ID=1152277

[trent]

The whole CPI thing is scam to keep people from revolting against the inflation masters. A human being needs 3 things to survive - shelter, food and energy, everything else is BS. Tell me which one of those is deflating in Canada?

I see deflation in the -ve inflation numbers released by the aforementioned countries in the first post.

I also see deflation here:

CPI from Stats. Can.:

September 2009 -0.9
August 2009 -0.8
July 2009 -0.9
June 2009 -0.3

http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=16089999&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0

Gold not up due to inflation concerns, but credit crunch:
http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=16101303&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0

Inflation rate stayed "well below zero" for the fourth consecutive month in Canada:
http://www.google.com/hostednews/canadianpress/article/ALeqM5izG5r2MzsizeGHEdc6mrYP526bug
http://www.inews880.com/Channels/Reg/LocalNews/story.aspx?ID=1152277

[Rickson9]

The whole CPI thing is scam to keep people from revolting against the inflation masters. A human being needs 3 things to survive - shelter, food and energy, everything else is BS. Tell me which one of those is deflating in Canada?

Of course. If it doesn't jive with what you believe, then it's a scam. I see how it works.

[trent]

Of course. If it doesn't jive with what you believe, then it's a scam. I see how it works.

So you think that CPI is not manipulated and the inflation it reports is close to reality?

[Rickson9]

So you think that CPI is not manipulated and the inflation it reports is close to reality?

I believe that if it doesn't jive with what you believe then you will call it a scam. Is there any reason to discuss it beyond that without wasting both our time?