Comments on: Deflation Risk Fading http://www.fatpitchfinancials.com/1490/deflation-risk-fading/ Special situation stocks and value investing Tue, 07 Feb 2012 02:35:15 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Festival of Stocks at Silent Treasure http://www.fatpitchfinancials.com/1490/deflation-risk-fading/comment-page-1/#comment-396190 Festival of Stocks at Silent Treasure Tue, 31 Mar 2009 13:40:57 +0000 http://www.fatpitchfinancials.com/?p=1490#comment-396190 [...] Carnival of Personal Finance is also up at Wide Open Wallet. My post regarding my thought on the risk of deflation decreasing was accepted under the Taxes and the Economy [...] [...] Carnival of Personal Finance is also up at Wide Open Wallet. My post regarding my thought on the risk of deflation decreasing was accepted under the Taxes and the Economy [...]

]]> By: John http://www.fatpitchfinancials.com/1490/deflation-risk-fading/comment-page-1/#comment-394778 John Fri, 27 Mar 2009 12:45:38 +0000 http://www.fatpitchfinancials.com/?p=1490#comment-394778 I think the government is pretty much willing to confront inflation rather than deflation. For example, if the inflationary tends to be there for one year the government would see some improved fiscal conditions.But what after that? there will be only a severe deflation. I think the government is pretty much willing to confront inflation rather than deflation. For example, if the inflationary tends to be there for one year the government would see some improved fiscal conditions.But what after that? there will be only a severe deflation.

]]> By: Wide Moat http://www.fatpitchfinancials.com/1490/deflation-risk-fading/comment-page-1/#comment-391623 Wide Moat Thu, 19 Mar 2009 14:51:55 +0000 http://www.fatpitchfinancials.com/?p=1490#comment-391623 Just to add a little more color to your observations... energy costs are not deflating, and given how energy-intensive the American economy is, those costs have to get passed through. Wages however are deflating, which will mean less dollars for consumer goods. Whatever goods that are sold will have to be at a high enough price to cover inputs like energy, debt service, etc. But with less wages, there will be less goods sold. Unless, of course, the Americans decide to lever up on credit again, despite losing their jobs. Just to add a little more color to your observations… energy costs are not deflating, and given how energy-intensive the American economy is, those costs have to get passed through.

Wages however are deflating, which will mean less dollars for consumer goods. Whatever goods that are sold will have to be at a high enough price to cover inputs like energy, debt service, etc. But with less wages, there will be less goods sold. Unless, of course, the Americans decide to lever up on credit again, despite losing their jobs.

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