Is deflation taking a death grip on this economy?
And your “green shoots”:
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
Onlooker
I really don’t get the value of the household inflation expectations survey. Haven’t we well established that people have no friggen’ clue about economic issues? I suppose that it could say something because people act based on their expectations, but how much value can this have? And what can it be used for?
Bill
TPC, as always, great stuff! Question for you: is any of that decline in outstanding CP being made up elsewhere? I’m guessing the answer is no. If that’s the case, my mind boggles at the implications of a 50% decline in CP outstanding. …Take care.
Cullen Roche
Mostly via government lending, but Bernanke is certainly trying to encourage risk taking. The last thing he needs is further risk aversion. Either way it’s a sure sign that deflation is still very much with us. CP issuance could pick up here if risk appetites begin to pick up further, but we’re seeing no signs of it as of now….
Cullen Roche
You could easily make the argument that we came down too far too fast and now the market is moderating a bit. Now the question is this: doe we actually recover or do we make a slow steady decline as the economy stagnates and valuations normalize over the coming 5 years a la Japan????