Links: 2008-12-16: the deflation edition
Given the Fed’s dramatic cut to a Zero Interest Rate Policy (ZIRP) and a verbal commitment to quantitative easing, I wanted to change things a little for this round-up. I am going to link out to myself by going back in the archives and fishing out to see what I actually said about inflation and deflation over the last 8-9 months.
In my own head, I would say I have been saying all along that the real threat is deflation, especially debt deflation. At a minimum, it was a useful exercise to go back and see what I said to keep me honest. I felt that inflation was spiraling out of control due to easy money early in the year. This would only make the landing that much harder. Deflation would result.
It seems consistent to me. But, I could be totally full of it. You be the judge. Here’s what I wrote in chronological order below.
One note: my predictions from July in the post “Ten Predictions for 2008” were on the money but wildly understated how quickly things would fall apart. Most of the posts on the inflation-deflation debate were from the summer. Since Lehman went bust, the deflation scenario has become ever more likely.
Is the Fed reckless? – 25 Mar 2008
Inflation is here to stay – 9 May 2008
The Fed is on the easy money trip – 22 May 2008
Forget Inflation, debt deflation is the real threat – 9 Jun 2008
Is the Fed going to raise rates? – 13 Jun 2008
Bernanke is responsible for the market meltdown – 27 Jun 2008
Inflation or deflation? – 30 Jun 2008
BIS warns of worsening credit crisis and deflation – 30 Jun 2008
Will the ECB incite the Armageddon scenario? – 3 Jul 2008
The inflation-deflation debate – 21 Jul 2008
Ten predictions for 2008 – 28 Jul 2008
Random musing: 9 Aug 2008 – inflation – 9 Aug 2008
The inflation – deflation debate redux – 10 Aug 2008
Flight to quality? – 21 Aug 2008
Liquidity – 7 Oct 2008
Bloomberg.com: Obama Will Take Us Backward By Channeling Keynes: Amity Shlaes (Just putting it out there)