[Econ ] There goes the deflation theory??

http://quote.bloomberg.com/fgcgi.cg...y&middle=ad_frame2_energy&s=APg8HhxTuUmFsbHkg

[Snip ]

Rally by Natural Gas, Cocoa, Oil and Wheat May Inflate Prices
By Claudia Carpenter


New York, Dec. 29 (Bloomberg) -- Natural gas, cocoa and other commodities fueled the biggest one-year jump in raw-materials prices in almost three decades, a rally that probably will increase U.S. consumer prices during the next few months.

The Reuters Commodity Research Bureau index has risen 24 percent this year, the biggest gain since 1973. Higher prices will likely make it more expensive for Americans to run furnaces and put food on the table, investors and analysts said.
[ End snip ]

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Could be that the economy is headed for inflation AND deflation at the same time.

Maybe a biflation or stagflation: where the prices of commodities (food, energy) sharply rise, while the growth of the economy is blunted, jobs are down and the prices of non-commodities (cars, houses, luxury items) sharply fall.

The feds are cranking out dollars in overtime and the dollar index is already at 102, and falling. That's a lot of inflationary pressure.

- BGB

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BGB

My take on it, is a new variety of stagflation due to debt saturation.

The prices of items usually bought with cash will rise.(falling production)

While those usually bought with debt will fall.(rising defaults)

James

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James,

I agree.

................. biflation.

- BGB

ps - Have you ever seen the term "biflation" used before?

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Man you guys are running hot today - thats exactly whats happening and the fed aint too worried about it as long as there is a form of inflation it keeps away the spectre that Japan has been going through -

BGB

Biflation......That's a good one.

Hang on to it,you may have coined a new term.

Works for me...... Bipolar,Bise..... you get the picture.

James

Let's see, the gas problem is caused by people having too much fiat money to buy gas...

The cocoa problem is caused by people having too much fiat money to buy chocolate bars....

The wheat problem is caused by people having too much fiat money to buy bread...

Or is it because the environmentalists have shut down every source of power except natural gas so the REAL problem is that people have too much fiat money to buy electricity wich requres those plants...

But no, the REAL problem is that people have too much fiat money to buy big houses which require more electricity which requires more power plants which are not allowed to use coal....

Hmmm!

I like the simple solution. People have too damned much money. It should be taxed away from them.

Hillary for 2004! There is our answer to the problem!

Actually, I think we're seeing the beginning of 'retroflation', the condition that exists when luxuries deflate and essentials inflate simultaneously.

See this post of Maher's for a full explanation:http://www.timebomb2000.com/vb/showthread.php?s=&threadid=13099&highlight=retroflation

Troke,

I'm afraid the "real simple" solution is that there are too many people.
I really like that biflation term.

Capt Teach

Troke,

You got it. Hillary in '04 plus signing the Kyoto Accord. That'll shut down our economy completely and bring the price of commodities down along with everything else.

Everything will be really inexpensive. Of course, no one will have any fiat money to pay for anything so its price won't matter.