Saturday, December 5, 2015

Is Present Deflation a good thing? more remarks concerning this

I think deflation right now is caused by really low oil prices more than anything else. So, the present deflation is illusory in this sense and likely will go away once oil prices skyrocket again. (Whenever that is).

What is important here is to understand that this "Deflation" is temporary. Whether this temporary is one year or 5 years it is unknown at present. However, prices likely will edge up when it is in Saudi Arabia's financial interests very slowly at first.

Saudi Arabia and all Sunni Governments are in various proxy wars with Iran and Russia at present. So, this is important to understand in the context of everything going on here right now.

So, Saudi Arabia and other Sunni nations need for oil cash would have to be balanced against any gains by their enemies Iran, Syria, Iraq and Russia through higher oil prices.

So, as you can see deflation is unnatural and not a part of an actual market economy but rather generated by a war time economy.

And so if this suddenly changes this could be very dangerous for the whole world because of it's extremely unnatural setting and the damage it could do to most nations great and small in many many different ways. So, unless the world prepares for this outcome it could become temporarily catastrophic or lead to a world wide great depression worse than the 1930s.

There may be many elements in addition to  this that I'm not properly addressing here. However, this is the biggest single element of deflation that I can presently see.

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