aequalsa Posted September 1, 2011 Report Share Posted September 1, 2011 The question is, will they get it wrong, and in which direction? Right now everything policy-wise points to DEflation, not inflation. OP I would clarify that "the question" is, in what direction? The wrongness is a certainty. I can't see them pushing deflation in anything but the short to medium term. Any debtor is necessarily a fan of inflation. Quote Link to comment Share on other sites More sharing options...
OptimizedPrime Posted September 1, 2011 Author Report Share Posted September 1, 2011 I would clarify that "the question" is, in what direction? The wrongness is a certainty. I can't see them pushing deflation in anything but the short to medium term. Any debtor is necessarily a fan of inflation. No, the Fed is certainly "trying" to achieve an inflation target of a point or two. They might get this right. They have before. And to be sure, I don't think the austerity crowd is "pushing" deflation, they are merely pushing fiscal cutbacks and I doubt most who are pushing for this understand what they are doing vis a vie *flation. Debtors are fans of inflation, but creditors are fans of deflation. With our interest-group driven political system such as it is today, it's completely unclear who is going to win in the long run. But yes, no doubt, creditors are liking what they see in the short run. OP Quote Link to comment Share on other sites More sharing options...
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