These amazing satellite images show sprawling cities built in remote parts of China that have been left completely abandoned, sometimes years after their construction.
[[wysiwyg_imageupload:871:]]By Clif Droke
The inflation versus deflation debate has raged for years but since the credit crisis the debate has become highly politicized. If the credit crisis taught us anything it is that the risk of deflation far outweighs that of inflation. Yet there is an entrenched view emerging in political circles that is actively opposed to the government’s attempts at re-inflating the economy following the deflationary collapse of 2008.
It’s holiday time and, as the saying goes, it is better to give than to receive. Tech Ticker’s Aaron Task did just than when he stopped by Minyanville’s annual charity Festivus event bearing the gift of good-spirited debate. All in good holiday cheer, the topic of discussion that evening: Are we in an age of inflation or deflation?
‘Tis the season to spend, spend, spend and it looks like consumers are doing just that. But, can this momentum spur a sustainable recovery and how long before people in this country are put back to work? Charles Nenner of the Charles Nenner Research Center has a positive outlook on our situation over the next few months. But beyond that his prediction is grim: he thinks we are bound to be the next Japan.
Clif Droke: Between now and the fateful year 2012 when the final “hard down” of the 120-year cycle gets in full swing, we’ll likely experience what might be called a “different kind of deflation.” That is, while the deflationary undercurrents of the long cycle continues, periods of sometimes sharp “inflation” will be seen at time on the surface, only to dissipate once the government’s re-inflationary efforts cease.
[[wysiwyg_imageupload:604:]]By John Mauldin
Before we get into this week's outstanding Outside the Box, I want to comment on QE2 and the efforts by some Republican economists to urge legislators to get involved to stop it (see the front page of Monday's Wall Street Journal). That pushes my comfort zone a little too much.
First, I am not a fan of QE2. Never have been. If it had been my call, I would have punted and told the guys in the Capital that the ball was in their court to get their fiscal house in order, because that is the main source of the problem. But Bernanke and the Fed felt they had to "do something," to demonstrate they got the seriousness of the situation. If the only policy tool you have left is the hammer of printing money, then the world looks like a nail.
Gary Shilling, who predicted the U.S. housing collapse, says the stock market is overvalued and foresees a “significant” selloff within a year as the Federal Reserve fails to stimulate economic growth.
The debt crisis in Ireland is easing a bit at week’s end. Irish debt prices rose for the first time in 14 days Friday, sending yields on the two-year note down 81 basis points. The situation stabilized after Britain and four other European nations, including France and Germany, issued a joint statement promising to stand behind all of Ireland's debts.
[[wysiwyg_imageupload:350:]]By Bruce Krasting
Social Security announced that there will be no increase in benefit levels for another year. The reason? Deflation. Based on the Cost of Living index no increase in checks is justified. You might get an argument on that from the 60+% of the beneficiaries whose primary source of income is SS. This will impact the macro economic picture.
In the period 2000-2008 the average COLA increase was 3%. Because of the big eco dump it has been zero for 2010 and now again for 2011.