A ‘Draw’ in the ’Flationary War

If you were describing the day’s action in terms of our “war” between inflation and deflation…you’d have to say it was a draw. Deflation has been gaining territory – following its massive counterattack, launched a couple weeks ago. But yesterday, the front stabilized. Stocks were up, not down. And consumer price inflation was back in the headlines.

On the other hand, gold’s big drop was clearly a victory for deflation, not inflation. And we got an item from the Wall Street Journal that reminded us that the U.S. economy is still just beginning a deflationary pullback:

“Record Store Closings.”

We were too busy to read the accompanying article. For a second, we thought we might have misread the headline. Maybe it meant that ‘record stores’ were closing. Then we remembered; there aren’t any stores that sell records any more. So, we must have read it right the first time – retail is in trouble.

There is probably nothing surer, dear reader. After a spending spree that saw Americans spend ALL there money…and then some, they are not now going to spend MORE. It’s not possible. Instead, they are going to spend less. And that means the retailers are going to sell less. And it means that they are going to need fewer clerks…and less space.

This is not the time to be holding retailers…or shopping malls – especially those that are far out in the boonies.

Bill Bonner
Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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