Gentlemen, I thank you for your responses:
LP: Yes, it looks like deflation to me even though the banksters and gov’t would much the rather have inflation. The central banks can magically produce money and loan it to banks, But, as you have said, if it isn’t loaned out, the economy suffers.
I also think gold will be good in deflation. Silver looks iffy as it is considered more an industrial metal.
M3 in OZ at 23 %; in the US about 15 %. Huge numbers.
Deadeye: Thank you for taking the time to find an article explaining the arduous journey of money. It will be a great help.
Ferret: The US consumer is tapped out:
maxed out house refinance/cash outs
credit cards maxed, with interest rates, penalties and monthly payments increasing, defaults rising
auto loans coming due.
Our wages/salaries are not keeping up with REAL inflation and do not show signs of rising with the expected accelerating price inflation in ‘08. How does the American consumer support inflation without cash in his pocket?
When the CPI takes off in Australia will wages/salaries rise along with it?
Again, thank you gentlemen.
I wish you and all Tenters a Happy, Healthy and Prosperous New Year.