Deflation, Give Me a Break
All this deflation talk coming out these days has to be taken with a grain of salt. House prices were 46 percent above trendline in 2005 and haven’t even come down to trend which is still headed higher. Now Bernanke is floating a plan to fix a problem caused by low interest rates with even lower interest rates. Only two results can come out of that, a stupid class of Americans will be reinforced in their behavior and inflation can be the only final outcome. After gold goes to $ 4000 we can have the real crash.
Commodities and oil are in the same boat as housing. Their prices are just coming down to trendline also.
We are waiting for tomorrows labor number and a close over 900 on the S&P in the next week.