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Deflation Nation

Wednesday, November 26, 2008

Peter Coy, economic editor at Business Week, talks about rising concerns over deflation in the US.

Guests:

Peter Coy

The Morning Brief

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Comments [15]

Ben Thompson from NYC metro area

Prices won't be coming down. Deflation will be temporary; maybe 6 months. The real monster will be inflation. You are going to see inflation like you can't believe starting in late 2009/ early 2010.

Nov. 26 2008 10:53 AM
Cary from Yorktown Heights, NY

I keep hearing the refrain that the big financial companies are "too big to fail". If this is true then it follows that we should save them, but also force them to be divested into smaller companies which don't threaten our financial system. That would also encourage job growth, and provide a disincentive for large companies to take on high risk derivatives.

Nov. 26 2008 10:51 AM
Michael Hinton from palisades park, nj

why are the views of Peter Shiff so ignored with regards the present crisis?

Nov. 26 2008 10:48 AM
robert from park slope

Speaking of Japan, how much of the downturn has to do with demographics? Our economy soared while baby boomers were in their peak earning years, but now as they ready for retirement things seem to be slowing down.

Nov. 26 2008 10:43 AM
Elvin from NJ

Someone asked what Americans can do to help the economy. They can protest the government giving billions of dollars to bail out corporations. They can protest the government continuing to wage two illegal wars. They can refuse to buy products that damage the economy and buy healthy products, whether it be hybrid cars, local food, fair trade products, etc. There's plenty that we can do!

Nov. 26 2008 10:42 AM
KC from NYC

Aren't we helping these banking criminals out enough by paying for these bailouts? There's a difference between being helpful and being a sucker. Save your money, people. At least whatever money you're allowed to keep.

Nov. 26 2008 10:41 AM
anne from nyc

It's good for individuals to save more of their hard-earned money, right? It makes me very uncomfortable that the U.S. and world economies seem to be built upon the fact that Americans will buy an endless amount of stuff (including both necessities and unnecessary stuff & services). Compare Americans with people in China, for example, where average incomes are much lower but the savings rate is very high. Granted, the recent decrease in consumer spending is too abrupt, but it is seems that American consumers hear two conflicting messages:
1) save your $, invest for retirement, etc;
vs.
2) spend, spend, and spend some more, and keep the economy going.

Nov. 26 2008 10:41 AM
Rich Perez from Bay Shore

Yay...He didn't tell us to go shop at Wal Mart!

Nov. 26 2008 10:41 AM
smidely

Setting a ceiling of, say, 8 or even 14% on credit card charges

would do more for borrowers than any bailouts to either banks or consumers. REGARDLESS of deflation/inflation.

no responsible borrowers are going to borrow from a credit card issuer without knowing the cost!

one simple, moral law.

Nov. 26 2008 10:38 AM
Hugh from Crown Heights

Dina -- the caller about the apparently attractive loan offer -- should check the fine print to see what the interest rate lofts up to after 18 months. And she should check to see what happens if she is late on a payment. Chances are the interest rates can be raised to something insane like 30%.

Nov. 26 2008 10:36 AM
Anne from Nassau County

My husband and I locked a 30 year mortgage at 5.5% yesterday. Is this a pretty good rate?

Also, as first time home buyers, what further benefits can we reap from the current situation? Tax credits and benefits? Will yesterday's consumer bail-out proposal help us? How?

Nov. 26 2008 10:33 AM
Hugh from Crown Heights

My rent went up. Food prices don't seem to have come down -- not here in NYC anyway. And I'm still paying the same for electric and gas.

So what prices have come down?

And after I add up all of the above, all of my income is gone anyway, so it makes no difference to me if cars or radios or bed pillows are costing less.

Nov. 26 2008 10:33 AM
KC from NYC

I agree; lower oil prices ARE a good thing, for sure.

Well, except for the whole "destroying the earth โ€“ and by extension, ourselves โ€“ by relying on non-renewable energy sources" thing. Sure, our only hope for survival would be to get away from that, but why start taking the long view now?

Nov. 26 2008 10:32 AM
Tony from San Jose, CA

Can't we just drop cash from a helicopter to fight deflation?

Tony

Nov. 26 2008 10:32 AM
Robert from NYC

Well, we've been sold the fact that everything went up including food because of higher fuel causing production and delivery have gone up. Now that fuel has gone down why are food prices still up and still rising!?

Nov. 26 2008 10:30 AM

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