Where is the deflation?

[Debaser82]

Quote from fkbsuhites:

ah yes. yet another guru who has a habit of talking out of his ass

isn't this the same guy who wrote a "best seller" saying how the DOW was going to 40,000 or some such odd number by 2010?

It can still happen!

 

[Ivanovich]

Quote from GuyFawkes:

Where's the deflation? How about IL, where I live.
The recent asset bubble aside, haven't you noticed that one dollar buys practically what two dollars did two years ago?
Have you been in a supermarket in the last two years? They are practically giving away food now. Five dollars off a purchase of $25. Free milk and eggs when you spend $20. Corn Flakes for $1.
All the other retailers are giving discounts every day that they would usually have only reserved for old stock on Black Friday.
What about house prices? The official stats are generally rubbish but my experience is that homes are selling for 40% less than they were at the peak. Rental prices in IL have dropped considerably too.
A coworker just bought a Ford and got the equivalent of the brand new list price on their two year old car as a trade in discount for the new one.
Who is getting a pay rise apart from the TARP bankers and the state employees?
I see some price and wage inflation in the bloated public sector but back in the real world, the cost of living has reduced dramatically in the last two years.
If you are paying the same prices now that you were a few years ago then you are getting seriously ripped off.
This can't just be in IL...

Thing is, you're talking about rebates and the like, not prices. Prices are still essentially what they were, but manufacturers and the government are doing everything they can to coax spending by offering rebates, subsidies and trade. I work for a large consumer packaged goods company. We have products in just about every grocery isle there is and we haven't lowered one price. Instead, we spend more in trade against the pricing in hopes it'll spur purchasing. But we can't do this forever, and neither can any manufacturer. Because the prices WE are paying aren't going down (the producer prices).

So margin squeezing can only happen for so long.

 

[PlusMinus]

Quote from psychonin:

The US has been on fiat pretty much since FDR made it illegal for citizens to hold gold.

WTF? We were not on fiat technically until Nixon closed the window on trade partners who wanted to exchange their USD for gold. That is when we officially abandoned the gold standard. Citizens not being able to hold gold has nothing to do with fiat, since the Government was using said gold to back the dollar.