We’re Headed For World of Inflation
By Chief Pistol Packin' Mama on March 19, 2010 in Indicators of need for prepsBy: Julie Crawshaw
One way or another, RGE Monitor senior analyst Arun Motianey says we’re headed for an inflationary world.
The three most likely investing scenarios now, Motianey says, are inflation without indexation, inflation with indexation and deflation, says Motianey, who recently joined investment guru Nouriel Roubini’s Roubini Global Economics.
“Deflation is a very serious risk [but] inflation is a greater likelihood,”
With debt swamping governments from here to Europe to Japan, Motianey recently told Tech Ticker he thinks the central banks will probably choose to monetize public sector deficits.
“I’m expecting the central banks of the world to see the light,” he says. “This would be a period of voluntary inflation, instead of involuntary inflation” (like the 1970s), he said.
Well inflation is already here – it’s jiust not yet translated into across-the-board price increaeses. This “fear of deflation” is just a ruse by central banks to keep inflating the money supply. Deflation does not keep people from spending – they always spend what’s necessary. And money NOT “spent” is then saved which means it is credit to someone who invests it for capital goods etc. thus it is again being spent, only not for consumption. Money never lies completely idle to any extent whether there’s inflation, deflation, stability or a solar eclipse. For deflation to seriously happen, not only the current extreme credit expansion by the central banks and states (through “quantitative easing”, stimulus packages, monetising and then spending national debt etc.) but also the money that was released into the economy PRIOR to the collapse would have to be “mopped up” again. This is nowhere to be seen nor would it be technically possible (confiscation aside) so we will rather see inflation than deflation.