** 29-Jan-2021 World View: The Inflation Religion
Burner Prime wrote: Fri Jan 29, 2021 3:30 am
> You believe we're headed for deflation because John believes it,
> nothing more. You don't have any original thought on the matter,
> just parroting others as usual.
It always amazes me how there seems to be some sort of Inflation
Religion of people who believe that inflation or hyperinflation is
just around the corner. Ever since 2003, when I first started posting
that we were in a deflationary era, the so-called "experts" have been
predicting "inflation next quarter" every quarter. They've now been
wrong for 70 quarters in a row. You'd think they'd learn, but no,
there are still plenty of predictions of "inflation next quarter"
going around. However I did hear Powell say the other day that
"inflation was a long way off," or something like that, so I guess we
can feel some kind of relief that at least the Fed members are not
devotees of the Inflation Religion, since they're capable of at least
understanding the simple truth that if there has been no inflation for
70 quarters, then there probably won't be inflation next quarter.
I remember back in the late 2000s decade, there was a guy running some
sort of service that purported to be tracking the "real" rate of
inflation which, as I recall, was supposed to be around 17-18% at that
time and which was supposed to be growing every quarter. This guy
posted a graph every month that showed this increasing rate of
purported inflation and how it was going up. People would criticize
me for being naïve and not knowing what I was talking about, and to
prove it, they would point to this guy's "expert" graphs and his
long-winded explanations. Some of those posts are probably still
available on this forum, though it would take a while to search for
them. This guy was charging his clients a lot of money for his
"expert" advice, telling people how to navigate in the inflationary /
hyperinflationary world that was just around the corner. I don't know
how long he kept doing this, but I assume that at some point he took
his money and disappeared, and went onto charging different clients
for giving "expert advice" on something else.
Anyway, people who think inflation is just around the corner really
don't have a clue how inflation works, which is clear from the fact
that they've been wrong for at least 70 quarters, and keep making the
same mistake. (Cue the joke about the definition of insanity.)
Inflation is literally impossible right now, and for the foreseeable
future. We are in a deflationary era, and deflation is going to get
much worse. I've written about this many times, and if I have the
time and feel in the mood, maybe I'll write another article giving all
the reasons. But what's the point? Inflation is a religion, and
people who believe in it are not going to be convinced by reason,
especially if they've learned nothing from 70 quarters of being wrong.