Plus, if you hadn't noticed, stocks and houses are cheaper. Even gold is down. That's deflation baby. But knowing that Paulson is injecting like a tenderloin resident an hour after getting a welfare check; why aren't prices through the roof?
- fear savings
- people, and institutions, are scared to spend any money they have
- this means more money in the safe, less in circulation
- credit crunch
- decreased available credit = deflation
- trickle down inflation
- Paulson is throwing money at big institutions, it will take a while before we feel the effect
If nothing else changes, I agree with the video: we'll see mild deflation for one to three months, after which we'll experience hyperinflation.
Buffet was slightly premature (Oct 17, 2008):
Note that this is blatant Socialism.
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