Much more deflation to come?Submitted by ShannonOBrien on Thu, 11/13/2008 - 20:26
Here is a graph of the inflation-adjusted Dow:
- before 1929 we see a huge credit bubble
- 1929 to 1932 deflation
- 1932 to 1964 another bubble forms
- 1964 to 1983 deflation
- 1983 to 1996 another bubble (there's not any more data after that but I assume it goes up further)
Every time there is a bubble, it is followed by a deflationary correction. So doesn't it make more sense that there will be more deflation before inflation? It's only been a couple months since the bubble burst. When has deflation only occurred for a few months after a giant bubble bursting?