Did you expect me to say “inflation“? No, I’m saying deflation. As some well-known economists are worried about inflation, I’m worrying about deflation.

What happened just this week is amazing:

  1. M-1 money supply is on decline
  2. Housing starts are down 6%
  3. Thai cup will force players to decrease leverage
  4. Philadelphia Fed manufacturing index is -0.4
  5. Amaranth crash will force commodity players to decrease leverage (see M-1)
  6. NAHB housing market index is at the level, which is lowest since 1991

What inflation? See you at 3.5% soon.