what the gurus are saying
helping you understand deflation
deflation in pictures
Helping You Prepare to Survive & Prosper During Deflation
Deflation is one of the least-understood economic environments for investors, yet one of the most potentially devastating to the unprepared. Deflation.com connects you with the experts and resources that will equip you not only to stay safe during deflation, but to take advantage of the unique opportunities deflation can provide.
What are the Causes of Deflation?
Learn the two main causes of deflation and an example of how deflation played out in Japan in the 1990s.
What’s the Definition of Deflation?
Many investors think that “falling prices” is the definition of deflation. This is not accurate. Learn the definition of deflation.
Recent Expert Commentary
This is What Debt Deflation Looks Like
Expect confidence in corporate bonds to plummet. Normally sleepy Switzerland was the center of attention last week after the shotgun wedding between Credit Suisse and UBS. Both banks didn’t want the deal but the Swiss regulator, Finma, insisted on it taking place, even going so far as changing the law and not allowing UBS shareholders…
Printing Presses Switched Back On
It’s all so sadly predictable. Since it’s Saint Patrick’s Day, let’s start with one of my favorite Irish anecdotes. An American golfer was playing in Ireland and had a local caddy for his round. The first nine holes saw the golfer spraying his shots left, right, out of bounds and into the deep rough. Becoming…
A sign of things to come as debt deflation takes hold. All of a sudden, banks are in the spotlight. The collapse of Silvergate, the crypto bank, has coincided with a good-old fashioned bank run on Silicon Valley bank (SVB). The bank had accumulated heavy losses on its bond portfolio and finally, due to depositor…
Would the Real Fed Funds Please Stand Up?
This Fed probably wants to get back to normal. The chart below shows just how strange the last fifteen years have been in the financial world. The “real” Federal Funds rate can be measured in a few ways. This one takes the Federal Funds rate (the central bank’s policy rate) minus the annualized rate of…
Forget about the check, we’ll get hell to pay!
U.S. consumers are partying like it’s 1999. The latest Household Debt and Credit report from the New York Federal Reserve shows that U.S. consumer credit card debt reached a record high in the fourth quarter of 2022, surpassing the previous zenith seen in 2019. Credit card balances in aggregate now amount to $945 billion, zooming…
The Immaculate Disinflation
It certainly would be a miracle. In fact, deflation seems likely. An interesting phrase has entered the lexicon over the last few weeks. The “Immaculate Disinflation” is being used by many to describe the fact that consumer price inflation is slowing down (disinflating) but the economy is remaining buoyant, particularly the labor market. Economists and…
Corporate Crash Coming with Debt Deflation
Would you rather invest in T-Bills or corporate bonds? The days of TINA (there is no alternative), when short-term interest rates were essentially zero and people thought the only option available was to invest in the stock market, are long gone. With the Federal Reserve being led by the bond market into raising its official…
The world might soon wake up to its consequences. Last week we highlighted that the level of the European Central Bank’s bond assets, its balance sheet, was deflating on an annualized basis. The same deflation dynamic is occurring in the balance sheets of the Federal Reserve and the Bank of England as well. The minting…
Deflation Begins in the Eurozone
It’s a deliberate policy at this juncture. Inflation is rising prices and deflation is falling prices, right? Wrong. Unfortunately, we’ve become so used to using these definitions that we have lost sight of the true meaning of inflation and deflation. As the economist Milton Friedman famously stated, “Inflation is always and everywhere a monetary phenomenon,…