Comments on: Fighting deflation globally ain’t easy Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: Bill Stella Fri, 28 Nov 2008 22:01:01 +0000 re: “…potentially causing a new bubble. (Who knows what that would be — dirt, water, baseball cards?)”

I wouldn’t be surprised if, in our lifetimes, someone links growth-investments to water somehow. Seriously. Yes, I understand that you, the author, meant to be humorous, ridiculing market tendencies to overvalue the fad of the moment. But… Water sources are decreasingly public, increasingly private. Trading risk and profit opportunities, based on which company is best able to exploit public need (a.k.a. potential of drought and scarcity) isn’t as ridiculous as we may wish it were, and may indeed become the cause of a new bubble in our lifetimes. I realize it sounds like future-fiction, but if the way things are set up now remain and are perpetuated, the likeliest outcome is that competing capitalist interests will be fighting over water rights soon. (Need I mention that it’s a global problem with vast economic impacts, and historic precedents, too?)

A Google search of ‘water wars’ brings up more links and suggestions than I would have imagined. With a quick glance at some of the items I found:
– the site
– a / / article about water issues in the U.S. mdispatch/2008/09/water-wars-in-america. html and
– “about the struggle for water around the world.”

I’m no expert, but do think it’s in the public interest that more citizens pay attention to water rights, even if you’ve never had more problems with getting water than leaky faucets. It’d be best if we pay attention, educate ourselves, and are diligent about protecting water for humanity’s future. [yeah, that’s a vague conclusion, but this is just a posted comment.]

By: C C Waters Wed, 26 Nov 2008 20:57:36 +0000 But, people ARE spending. The demand side of the economic equation has changed/is changing.

Leading edge consumers are opting for more sensible product. Spam company is working seven days two shifts but can’t keep up with incoming orders. Long-term food supplies have a 6-10 week waiting lead time. Ebayers are frantically buying silver at twice the mark prices. Retro-seventies gardening, animal husbandry, and do-it-yourself books, tools, equipment have doubled in price due to demand. In a down real estate market, prices of good farmland have tripled. The list of such grand anomalies grows daily. Demand is not apt to be a future problem when mainstream retailers (suppliers) stop fishing with the wrong bait. (Just how many belly-rings does a family of four require?)

We have all been looking in the wrong direction. The US public needs value for their dollar, not more garbage for landfills: a vehicle built to be dependable with generic parts available–a vehicle the owner can keep running. An appliance that works flawlessly for more than two years. Tasteful clothing that wears well.

Never mind bailing banks and slippery stocks–put our money into retooling for an economy that offers essential product/fair wage/incentives to save. How hard could it be to do things open and right with the best interests of all? Such a business model can’t be more complicated than the underhanded one we are emeshed in now!

Why should America continue to buy and buy and re-replace items that won’t last. When will the throw-away society with its throw-away mentality end. It’s ending now. Never thought I’d live to see it.

By: TheCaptain Wed, 26 Nov 2008 02:05:30 +0000 The thing nobody seems to be asking is what happens when there’s no more room to cut rates because we’ve hit 0%? People assume things will get right before then, but if the solution is also the source of the problem (printing more money out of thin air), then why would anything change?

By: Pete Cann Tue, 25 Nov 2008 01:28:04 +0000 I just hope the Democrats stop spending really fast as soon as we return to inflation. I don’t want to hear, “Gee, isn’t it still happy hour?”

Incidentally, why is there so little talk of derivatives? I already suggested that James do a column on them. We seem to have derivatives in the amount of 8x-20x Gross World Product (yes, world). What the hey are these things, options to buy unicorns? Realistically, how many have to go “poof” and whose pocket catches fire?

By: Thinkjayant Mon, 24 Nov 2008 04:27:24 +0000 Just months ago we were in the midst talking about rising inflation. Now the frozen credit market and scare of deflation is looming. Things change a lot quickly.

Funny thing is as much i would like to see how this whole thing works out to better, i cant wonder and see it going horribly wrong.

With fingers crossed for a happening 2009 (in a better way)

Regards ThinkJayant

By: Henry Melgar Mon, 24 Nov 2008 04:11:29 +0000 I’m glad that everyone is starting to understand that a debt-based monetary policy wasn’t the way to go, well everyone except John Kunick. Is there a coincidence that both Peter Schiff and Ron Paul knew that the American Economy was going to collapse? Absolutely not. Any student of the Austrian School of economics could have told you that. Visit

By: tmirdotorg Sun, 23 Nov 2008 23:11:49 +0000 I do not quite understand that how far these speculators can go. It is understandable that economy is in big problem. There is not a single economist could emerge with a solution.However, the speculators are taking advantage of this confusion.
Americans vote for President Bush. Now the economist burn their brain to solve these masses. Why not those Americans who vote for President Bush they solve them. It is easy to interupt the economy but it is not easy to run it.

By: Gary Peters Sun, 23 Nov 2008 14:29:48 +0000 There have been many intelligent and interesting arguments listed above concerning the economic mess we now find ourselves in.

In my 54 years as a U.S. citizen, I have only experienced persistant inflation, one bout of high inflation and several modest recessions. A little deflation now sounds like a good process to help keep things balanced. I am lucky to have avoided anything like the great depression of the 1930’s.

Over the last 15 years, I’ve tried to save/invest 5-10% of my income in a mixture of stocks, bonds and CDs. I paid off my modest house off 13 years ago and made the decision that buying a huge McMansion was not a good idea financially. I pay off my credit card each month. I purchase plenty of sensible insurance. I only have one debt, a small car loan. I live conservatively within my means and try to realistically plan for an unpredictable future. I resent that the Fed has kept interest rates so low for the last 8 years. I see too many people that have been living a false financial dream that is now, rightly, turning into a nightmare for them.

I would bet that the U.S. will continue to print more money and lower interest rates again to try to get us out of this mess. People seem to tolerate inflation more because it is stretched out over time. Printing more money means debts are more easily paid off with cheaper dollars. It will give us all the illusion that the economy can get back on-track so that we can mindlessly consume even more stuff. People who think that saving money for tough times is a prudent thing (like me) will continue to be suckers. Inflation will continue to eat away at your savings.

There’s always some convenient reason to keep lowering interest rates and printing more money. This time the reason is a month or two of deflation … oooohhh …. so scary!

Don’t bet on our government finding a balanced solution to this mess. In the long run (2 years???), inflation will again rear it’s ugly head in a bigger way. Too many U.S. dollars spread around the world will come back home to roost. I don’t have much trust in the U.S. dollar.

My advice is to invest in anything you think will be a good hedge against inflation.

By: Jeremiah Sun, 23 Nov 2008 05:10:50 +0000 Isn’t this the plan? All the world is crying for a unified Global Economic system, including one currency. We may skip nationalism and move straight past that to Globalism. People are misinformed. Having a global economic system is not going to be better. Maybe in the short term people will feel as though they are all contributing to some Utopian good, but in the end, it’s the real world…and unless you’re handing out boxes of Soma while you ask people to take the mark of the beast, people will react in angst against this system. I pray for Divine Intervention! but then again, I cling to my Bible.

By: JoshL Sun, 23 Nov 2008 02:39:20 +0000 Deflation is good. It’s like the jugglers dropped the balls allowing us time to notice the pickpockets. End of story.