Friday, July 15, 2005

PPI, tame inflation? NOT. Fear Deflation

Wall Street and main stream media is still obsessed with inflation, so is Federal Reserve. My believe is that due to the massive debt inflation during the last 60 years especially during the last 4 years in which fed tried to prolong the growth cycle, we are facing the coming implosion of the debt bubble. The result of that massive implosion will cause deflation not inflation.

So PPI is down 0.1%, and Wall Street is cheering? They should be worried now, especially with material costs going up and they can't pass through their cost by increasing prices. We're are already transitioning into stagflation environment which is the precursor of deflation.

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