In my last post, I argued that we’re in a deflationary environment; prices are declining in spite of the fact that “Helicopter Ben Bernanke” is flooding the economy with freshly printed money.
The reason?
Consumers are in savings mode and aren’t spending.
But, isn’t the risk of inflation real given the amount of money the Fed is injecting into the economy? The definition of inflation is too much money chasing too few goods and services. In Economics 101 terms, there’s a lot more demand than supply and prices are driven higher. Read more »
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I’ve been convinced for some time that we’re in a deflationary environment – a climate of declining prices in spite of the massive amount of money that Fed Chair Ben Bernanke has pumped into the economy. I wrote recently about the cause and effect of a credit driven recession and a spike in the national savings rate – until consumers decide to begin spending money, there may likely be no inflation. And, it looks like consumers are not yet ready to begin spending. Read more »
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As I’m writing this blog entry, I am seated next to a gentleman on an airplane who commutes between his two business locations, one in Florida and one in Michigan. He is traveling to Florida for business as he does most every week. I am traveling south to the studios of FOX Business News to be interviewed for a story that the network is doing on one of the financial planning strategies that I’ve developed. Read more »
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