"Moderate deflation is actually the natural trend for a productive economy....Deflation is also the natural consequence of a contracting economy."If you did not just explode in laughter, you might need to go see a doctor, because something is wrong with your funny bone. Of course, the article is about why we should be worried about inflation:
"Because of the towering level of U.S. sovereign debt, it is inflation that remains the clear and present danger."So okay then...treasuries are at some of its lowest levels, inflation for 2010 in advanced nations, was predicted by the IMF to be 1.4%, GDP so far is projecting to be 1.4% or so, less than half of what the IMF predicted. And this guy says the "clear and present danger" is inflation, huh?
Michael Pento recites what happens in deflation (money supply shrinks) and then says:
"The last thing the Federal Reserve and Obama administration can tolerate is an increased debt burden brought about by a shrinking money supply."Now, I'm not going to get into the entire details, but his argument is this: The Obama Administration can't tolerate deflation because it lowers money supply and therefore tax revenue gets lowered, making it impossible to get ahead of federal debt. Therefore, people should be worried about inflation because inflation is the only way for the Obama Administration to pay down the debt and reduce the debt to GDP ratio.
Aha!
So there you have it folks...without any proof of inflation coming, partisans have now given to arguing about how great deflation is for consumers, most of all the unemployed, and that the Obama Administration is going to ruin this fun of deflation, by pushing the GDP up and increasing federal receipts through high interest rates.
Uh huh, and that's why you shouldn't vote Republican. But hey, just for kicks, I think Michael Pento should go all in and buy, buy buy (gold).
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