Recovery Killer?

The depression of the 1930's may have been painful, but it was a necessary economic adjustment, as is the crises we're currently going through. Decades of greed brought us here, now it's time to take our medicine and move forward. There is no real solution that will not be painful, now or later.

As people are putting off purchasing baby formula and Americans diets are going back to 'comfort foods' (read cheap less healthy), prices will have to be reigned in. The spike in gas prices directly resulted in a spike in the cost of living acroos the board. Now that those prices have returned somewhat to normal, commodities must be priced to match. Deflation took over during the depression because the product was not being purchased, Unless there can be a happy mediium reached between corporate profits and the average wage in this country we are doomed to repeat the same pattern.

Is inflation not simply put as deflation of your money?

David Lachman's right about the delfation's "two channels", but only 2/3 right. He forgot about the demographics in the Industrialized nations. In addition to debt and defered spending, most of the BB gen. have all the material possessions they "need". This, coupled with the loss of trillions in savings needed for retirement will cause a very much prolonged recession, if not outright depression...

try living on $9.00 an hour. with rent at $860.. plus utilities. and feed three other ,and furnish gas for a minivan . If lowering prices is bad for the economy , then these companies should be paying thier employees a comparable wages. to keep pace with inflation.

Sorry for the double post!

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Start surviving today, there are options, if your plan A isn't working out, it may be time to start looking at something else. A different perspective is what you may need. You can thrive, right now. Look at a new plan, plan B maybe! Read/listen to this audio from Robert Kiyosaki, "The Perfect Business?". Get it FREE for a limited time NOW. http://www.freecdforyou.com

Thats liberals for you. Want to take care of from birth to death

Let's see. I can buy the following items today at a cheaper price than a few months ago:
1. A new house
2. A new car
3. A share of stock in almost any company around the world
4.Gold
5. A gallon of gasoline
Seems like it could be a deflation to me. And wait. Hundreds of thousands, and maybe millions, are about
to lose their jobs and their purchasing power will soon go way down. And the government is pouring hundreds of billions of borrowed dollars into the economy and all this is still happening. Circuit City declares bankruptcy BEFORE the holiday shopping season even begins. I remember what one economist wrote a few years ago - the strength and size of the economy is still much larger than the government's ability to control it. And I remember reading what Russian economist Nikolai Kondatiev wrote in the 1920's, that capitalist societies go through a 50-60 year cycle of boom and bust. Assume the depression era ended with the end of WWII, that was 63 years ago. Depression, here we come.

Deflation is a fantasy when prices are set by 'what the market will bear'. Best case; gasoline is sold by setting prices at the highest level bearable. Now that consumers have refused to buy at $4 the price has dropped. This looks a lot like deflation to me! But it's entirely consistent with the 'what the market will bear' pricing practice. Same with housing, buyers cannot and will not buy at 2006 prices. This is reality not deflation. It will disappoint all parties waiting for taxes to be paid on retail sales.

This seems to be the huge blind spot of those engineering recovery. Bail outs for the automakers seem essential but who will buy the lower priced cars that they will have to develop? It will be years before inventory is sold. No sales mean the bailout is really a throw away before the inevitable bankruptcy.

Wasn't the promise of lower prices that the repugnant ones used to sell their pathetic outsourcing of good paying union jobs to countries like China? That didn't work out very well as prices increased as corporate executives looted all the profits while our middle class suffered downsizing. Actually some deflation, as is happening in the overblown housing market, is good for our economy for the long haul.

In our consumer based economy we now have too few good consumers who can afford to purchase stuff because their easy credit has been cut off. We need to take back those good paying unionized manufacturing jobs so we recover better consumers. We need a lot more jobs here so we have more consumers who will drive the economy back up and unfortunately drive inflation back up.

What a crock! Seriously, people don't buy because they are repaying their debt caused by the over inflated rip off prices they had to pay... The economy will spin around when people get the debt cleared; then they have the choice to buy.

I am not worried about lower prices, I would like to see honest (true) prices. It makes me wonder when a bid on my roof over a year ago was over 6000.00 and this year dropped to 4800.00. That sound more like price gouging so the owner could just live on a higher scale. Obviously he still made money and paid his employees their same wages. I feel more of this type of thing is going on - the idea of if they will pay that for it why not charge that or more. Larger porfits for many companies where that extra money only went to the top guy. Why do you think so many more people are living and building these big homes. Many companies are price gouging so I think lower prices just might help the economy.