Individual decisions and conditions. However, here are some thoughts:

- What you experienced in the late 70s was a highly inflationary environment. Deflation is when prices drop.
- Sustained deflation has been rare in the US for the past century. The Great Depression is the best example, though we have had brief episodes of declining prices other times
- One reason we have rarely had deflation is the federal reserve has generally been accommodative during recessions (lowering interest rates and boost the supply of money). One reason the Great Depression was so severe is the fed actually tightened Initially until Roosevelt came into office

- Some Economists are concerned about deflation now, partly due to the steep drop off in the economy in Q2, and partly due to high public and private sector debt (which tends to pull demand forward and depress future growth).
- Others are concerned with inflation in the intermediate and longer term, due to the substantial increase this year in the money supply and the effects of restructuring supply chains and On-shoring
- One distinct possibility is Stagflation (what we experienced in the 70s), which is combined inflation and slow growth. This is the worst of all worlds
- The fed is somewhat limited in its options because unemployment is so high right now. It has therefore said it will keep rates near zero for the next 18 months at least. As I believe the latest readings on inflation are about 1.5%, this means we have negative ‘real’ (i.e., inflation-adjusted) rates right now — an unusual phenomenon that sends distorted signals to the market

- These uncertain conditions partly explain the gyrations of commodities like gold and silver, which have experienced big up and down days (in an overall rising trend) as investors place bets on what conditions will be and what that may mean for further
monetary and fiscal intervention






[Post edited by RickPerry at 08/21/2020 1:39PM]