Subject re: inflation - deflation, some articles Posted 01/12/02 17:10 - 57 reads Posted by RALPH5 Post #10593 - in reply to msg. #10584
I think what America is experiencing at the moment Rod is Deflation.
Look at the recent record current account deficit, interest rates going down with virtually no effect on comsumer spending.
Americans are loseing faith in their own economy with all attempts by the Government to stimulate it. Consumer confidence is down with people saving money rather than spending it.
I read a report recently showing savings were up by roughly 8%.
The American government has moved away from the Gold standard thus promoting Fiat money expansion, the effects of which are still to be realized.
Bush needs a war to stimulate inflation and possibly reverse the current situation after his tax cuts were blocked in the senate.
Possible outcomes: Hard to say, there are many.
Terrorism is instilling fear and caution within the American public and is having great effect in quelling consumer spending thus inturn growth.
Where it will all end remains to be seen but one thing for shore it wont be over soon.
America makes up 52% of the global economy so if they suffer we suffer plain and simple.
