Response to Zero Hedge "Deflationists Take Note"
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Numerous people have asked me to respond to the Zero Hedge post Deflationists Take Note: Bernanke Succeeds In Offsetting Shadow Banking Collapse
In essence, I had already addressed the issue in Williams Calls for "Great Hyperinflationary Great Depression"; A Very Easy Rebuttal when I said ...
My call does not change. The US will go in and out of deflation for a considerable period of time, just as Japan did. The determining factor is mark-to market valuation of credit and money supply.Some asked for a further explanation and emails still come in asking for a reply. In response, I added an addendum to my "hyperinflationary depression" rebuttal to address topics covered by ZH in his post.
Right now, the Fed has temporarily overcome massive deflationary forces. For how long remains to be seen.
If you missed it, please click on the previous link to see a detailed response specifically to the "Deflationists Take Note" article.
Bottom line: All things concluded, there is ample reason to believe the US is still following the path of Japan, and on a marked-to-market credit aspect basis the US will likely hop in and out of deflation for the foreseeable future.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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