Deflation is here - as we expected

 

 

 
 

 I have been expecting deflation for 3 main reasons.

1. The economy was likely to slow down.
2. Commodities were declining across the board, including oil, copper and lumber.
3. Auto and housing starts were going to stumble thus creating two major headwinds for the economy.

These trends are still very much in place and "inflation" will     continue to decline as long as these 3 trends are in place. (Click on the chart to enlarge it).  

 

The problem I see is these 3 trends are not going to reverse any time soon.

 

If deflation is here to stay cash is king. Debt is a no-no.

More details in The Peter Dag Portfolio on www.peterdag.com

George Dagnino, PhD

Editor
The Peter Dag Portfolio
Since 1977

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