Can the Deflation Equation Produce Good News for the U.S. Economy?
In its December Economic News Release, the Bureau of Labor Statistics seems to confirm that the U.S. economy has clearly entered a deflationary period. To be accurate, the BLS does not actually make judgments like that for public consumption. “Deflation” is Mr. ToughMoneyLove’s hard truth assessment of this recent data. (What would you call it?) Here is a chart of the most telling data – the monthly percentage changes in the urban consumer price index over the past year: Check out the CPI ski slope nosedive for November. I think (and many economists agree) that the downward trend will continue into 2009. Unfortunately, other opposing evil forces are at work. OPEC – perhaps joined now by Russia – is striving mightily to cut production in a desperate attempt to force oil prices back into the unconscionably high zones of earlier in 2008. (Let’s all hope for a colossal OPEC failure on this one. Wouldn’t it amusing to see a 2009 yard sale of limos, jets, and boats by all of those oil sheiks
