Bernanke says : Deflationary Depression. What say you to that?

[dixiegrrrrl]

"The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013."

( ZIRP for three more years)

and look what Treasuries did...dived.

http://federalreserve.gov/newsevents/press/monetary/20110809a.htm

In deflation, savers continue to get screwed.

but this time around, looks like the banks are in trouble too.

What say you?

[SpiralHawk]

1. TeaFlationary TeaPression (R)

of course...

[phantom power]

2. Deflation generally favors saving: your dollar buys more.

[Taitertots]

5. Who is saving? Rich people...

Who has lots of debt? Everyone else.

[phantom power]

6. Be that as it may, the OP said "savers get screwed" -- which is not true of deflation.

But yes, in a deflationary economy "cash is king" -- and rich people with plenty of cash do even better.

[jwirr]

3. Are the banks really in trouble again or are they just setting themselves

up for another bailout? I do not trust any of this.

[westerebus]

4. All I can say is good luck.

The Bernank has spoken. The FED window is open at low low rates, but no QE for the here and now.

He just plugged the wound is all.

The banks want the QE. Wall Street wants the QE. PM bugs want the QE. Commodity traders want the QE. The MIC wants the QE.

Even as the FED prints, the money is not making it into the economy that will create jobs.

Not in this country anyway.

We still have the same system in place.

Two parties that don't give a shit about jobs except their own.

Deflation is here for years to come while food and fuel are bid higher as the dollar gets weaker.

Stagflation with big helping of austerity.

All I can say is good luck.

[dixiegrrrrl]

7. All I can say is Sayonara. Japan, here we come.

[westerebus]

10. I hope we can avoid the glow in the dark quantum malfunction.

Given the crew that got us here, we really need to lower our expectations. Gallows humor.

[dixiegrrrrl]

11. "gallows"...funny, that is what i was thinking about the crew that got us here.

Fitting.

[bemildred]

8. Deflation is good for people with cash, your cash buys more stuff.

Deflation is bad for people with stuff, your stuff is becoming worth less cash (e.g. real estate).

Inflation works just the opposite.

Different markets are separate, too, e.g. gold is inflationary right now.

Bernanke's advice is not worth a bucket of warm spit, his JOB is to manipulate your expectations.

[Yavin4]

9. What We Have Is Some Deflation with Some Inflation

We don't have purely inflation nor deflation. We have deflation in labor prices (wages) and housing prices. We have inflation in food and energy. On balance, we have moderate inflation, and everyone gets screwed except for the bankers who access to vast amounts of free money to play derivative games all over the world.

For the typical American, they get screwed from all sides. They cannot raise their wages to pay for increased fuel, healthcare, and food. They cannot sell their homes because it's underwater, and there are no buyers. They cannot save their money because it is getting eaten alive by inflation. Finally, the stock market is nothing more than a casino, and thanks to the banker speculators, it could blow up at any time.

Wait. There is one thing that you can do: Buy Gold and Silver.