Deflation would be Good

There was was no Brie Cheese at Sam’s Club, and QFC has some lower priced substitute brands of Brie rather than the good stuff. I personally want the more expensive good Brie if I’m going to buy it, which I admit isn’t often. There has been a lot of substitution at the super market lately. Lower prices on coupon ads to get you in the door, but I see fewer of the higher priced products in the grocery.

I noticed gas prices are coming down after touching $4 a gallon again. What seems to be lagging is the price of housing, and transportation. Some cars have come down in price, but the auto industry, like Real Estate, is living off that low interest rate payment plan.

The consumer has debt, lot’s of it. There are charts, and graphs all over the place, the debt clock is the one I put up the most. Deflation would help to broaden our national economy so that more people had more money to create more velocity of money in the middle class. Something has to give in order to get more dollars into working people’s hands.

Business can survive, and thrive with a little lower price point. Business can get more market share by attracting consumers with a reasonable set of pricing rather than having to make a killing on each sale. We are a cash rich economy right now that is stuck by the fact that cash is sitting in reserves rather than in working capital.

Next post will be about how the government interference needs to come to a slow end, and taxation, along with regulation of small business needs to be lightened.

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