Best of both worlds?
This is so much better than old style ’70’s stagflation.
How to have a real depression and commodity reflation all at the same time.
Print oodles of money but give it to your select few friends only.
What have I not understood?
The reason for this reduced indifference from vendors of all descriptions is the problem deduced by Fisher, namely that a lack of clearing in the markets leads to continued deflation and shrinkage in aggregate demand. The easy money from the Fed and other global central banks has temporarily slowed the adjustment process, but the adjustment continues none-the-less.
In the US, a lack of consumer demand and an impoding real estate sector is offsetting the Fed’s ease and subsidies from Washington. In terms of incremental “friction” blocking a recovery or even forcing a decline in future GDP, we think the negatives clearly outweigh the positive factors.