The value of these super-abundant follies will trend rapidly to zero once margin calls and other bits of reality drastically reduce demand. Inflation, deflation, stagflation–they’ve all got proponents. But who’s going to be right? The difficulty here is that supply and demand are dynamic and so there are always things going up in price that haven’t changed materially (and are therefore not worth the higher cost) and other things dropping in price even though they haven’t changed materially. So proponents of inflation and deflation can always offer examples supporting their case. The stagflationist camp is delighted to offer a compromise case: yes, … Continue reading →

Source: Why Inflation Is a Runaway Freight Train