it’s like ’shrinkage’
so the bad news about the economy keeps on coming. i think we’ve moved beyond “wtf?” and even “off with their heads“ and we’re ready to understand the details. to ease you into it, i thought i’d hook you up with a little seinfeld humor from back in the day–you’ll see why i chose this clip in a moment.
inflation or deflation?
like the heads of the auto companies, we are in a private jet plane toward something bad and its either called deflation which refers to a persistent tendency, over an extended period of time, for prices and incomes to decline or inflation which is “a rise in the general level of prices of goods and services in an economy over a period of time.”
side by side, one may think that you’d rather live in a world where prices are deflated than inflated but you’re probably wrong and here’s why: deflation leads to slashed prices which leads to slashed jobs so say the economists. unfortunately, signs that we’re headed into deflation (beyond the cheap oil) are beginning to show up:
- room rates at luxury hotels fell 5.4 percent in the 28 days ending on november 15 (i myself experienced this when re-booking a hotel stay over thanksgiving)
- pre-christmas sales are starting before the day after thanksgiving, even in the posh places
- people are scooping up unemployment checks like these commemorative plates
deflation, inflation –either way it seems like the times ahead aren’t good. in my mind we’ve got two options: be like that frightened turtle and hide or be like george and try to find explanations for your predicament. i’m obviously for the latter. you are going to have a lot of time on your hands anyway, since it doesn’t look like you’ll be able to afford that house in the the hamptons this summer.
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