Author: admin

From Bahamian crawfish to Mexican shoes, and from Argentine soybeans to Ethiopian coffee, the world makes (and trades) in far more than just crude oil and petroleum products. However, given the current deflationary world, it is very notable how many countries in the world are dependent on commodities as the primary source of foreign income.

The following map of the world shows each country’s major export…

Source: BofA

via Zero Hedge http://ift.tt/1LQ1R5m Tyler Durden

Submitted by Brian Hunt via InternationalMan.com,

Have you heard of “negative interest rates”?

It’s become a phenomenon with economists and the media.

There’s a good chance you’ve read an article about it. We’ve covered it many times in the Dispatch.

I’m writing to tell you something about negative interest rates you haven’t heard. You certainly won’t hear about it in the mainstream press.

What’s coming at you is a historic event. It’s something our grandchildren will hear stories about…much like the Great Depression or the Cold War.

What’s coming could send the price of gold much higher in the coming years…and hand gold stock owners 500%+ gains.

If you know what’s coming, it could mean the difference between having lots of free cash in retirement or barely getting by.

To understand the gravity of this moment, let’s cover one of the most bizarre ideas in the world…

negative interest rates.

In a normal world, your bank pays you interest on your savings. It takes your money, pools it with other people’s money and loans it out.

The bank makes money by paying out less in interest on your deposit than it earns in interest from borrowers.

For example, it might pay out 3% to depositors while earning 6% from borrowers.

This is how it has worked for decades.

Negative interest rates turn your “normal” bank account upside down.

Negative interest rates could only exist in a crazy world where idiot politicians are in control.

Unfortunately, that’s just what we’re dealing with right now.

Politicians all over the world are ordering banks to charge depositors (you) a fee for storing cash.

It’s a perversion of saving. It’s a perversion of capitalism. It’s a perversion of planning for the future.

And it’s going to result in disaster.

Politicians think that by making it unattractive for you to keep money in the bank, you’ll save less money. Instead, you’ll spend more money on things like smartphones and cars. You’ll invest in things like stocks and real estate.

This would “stimulate” the economy.

This thinking is very, very wrong. No matter what the government does, it can’t force you to spend money. It can’t force you to make investments if you don’t see good opportunities.

Forcing people to pay banks to hold their money is a tax. It is wealth confiscation for the digital age.

The government and the mainstream press won’t dare call it a tax.

But that’s exactly what it is.

A negative interest rate policy is a tax.

Any time you hear a politician, central banker or news anchor say “negative interest rates,” just think “TAX.”

Think “TAX ON MY CASH.”

I’ll say it again: negative interest rates are going to result in financial disaster.

The coming disaster will wipe out many people.

But you don’t have to be one them.

I’ll explain how you can sidestep this disaster—and even make a lot of money as a result of it—in a moment.

But let’s quickly cover one more thing about negative interest rates…

The Ugly Twin Sister of Negative Interest Rates

If the government makes it unattractive for you to keep cash in the bank, you can pull cash out of the bank. You can simply store it in a safe or under a mattress.

Politicians know this.

That’s why they’ve created another dangerous policy that works hand-in-glove with negative interest rates.

That policy is banning cash.

You see, if you pull your money out of the banking system and stuff it under the mattress, you aren’t doing what the government wants you to do.

You’re not spending money or investing in stocks.

This is a major reason why governments are banning large cash transactions and large denomination bills.

They are fighting a War on Cash.

In just the past few years…

***Spain banned cash transactions over 2,500 euros.

***Italy banned cash transactions over 1,000 euros.

***France banned cash transactions over 1,000 euros, down from the previous limit of 3,000 euros.

And just a few weeks ago, former U.S. Treasury Secretary Larry Summers called for a ban on the $100 bill!

Historians aren’t surprised by Summers’ idea. Franklin Delano Roosevelt banned $500 and $1,000 bills in the 1930s.

You can bet that Big Government types like Hillary Clinton and Donald Trump will do the same thing in a financial emergency.

By making it so difficult (or illegal) to buy and sell things with cash, the government wants to force people into the banking system. That way, it can monitor us and coerce us into whatever it wants…like paying outrageous new taxes.

It’s all a dream come true for government central planners.

The governments say these new currency laws are for fighting terrorism, money laundering and drugs.

But the ultimate goal is control of society…and to confiscate the wealth of private citizens.

As former Congressman Ron Paul said, “The cashless society is the IRS’s dream: total knowledge of, and control over, the finances of every single American.”

Whether you agree with these regulations or not, the conclusion is obvious:

By driving us more and more toward trackable digital payments, the government has made it much, much easier to confiscate our wealth.

We’re like sheep that have been “herded” into a corral, ready for shearing.

And Hillary Clinton and her Big Government cronies are holding the clippers.

However, you don’t have to be sheared.

You can avoid the shearing by learning how to navigate what will become the largest underground currency market in history.

Hillary Doesn’t Want Your Gold. She Wants Your Cash.

On April 5, 1933, President Franklin Delano Roosevelt issued one of the most controversial orders in U.S. history.

It went by the name “Executive Order 6102.”

Not one American in 1,000 knows about this order. But to this day, many experts consider it to be one of the most destructive acts in U.S. history.

It violated sacred principles held by our founding fathers. It impoverished millions and confiscated the savings of honest, hardworking Americans.

Executive Order 6102 made it illegal for private citizens to own gold. Citizens were ordered to turn in their gold to the government.

Why would the government confiscate the wealth of private citizens?

You can fill a book on the history surrounding Executive Order 6102. But in a nutshell, it was the act of a desperate government in the midst of a financial crisis.

The government wanted the gold in order to increase the nation’s money supply. It believed an increase in the money supply would revive the struggling economy.

Please review those last two paragraphs…

An increase in the money supply…a struggling economy…a desperate government.

Sound similar to what is happening right now?

Since the answer to that question is “YES,” we have to ask another question…

Could such a confiscation happen again?

As the crisis develops, our deeply indebted government will act like a giant wounded beast, lashing out in all directions. It will grow more desperate for control. It will grow desperate for money.

And just like FDR did in the 1930s, it will confiscate the wealth of private citizens.

But Hillary Clinton (or Donald Trump, or whoever wins the election) won’t go after your gold.

Nowadays, the gold market is very small compared to the overall economy.

Going after gold would be too much work for the government.

The government is going to go after YOUR CASH.

It will regulate your cash. It will tax your cash. It will take your cash.

This has all kinds of implications for banking and the economy.

But here’s the most important thing you need to know as an investor:

Negative interest rates and their partner, the War on Cash, will create a renewed interest in gold. This could cause gold to double or even triple in value.

Even children know what the government is doing is crazy.

And people aren’t going to take this lying down.

Rather than participate in the government’s monetary farce, people will go underground.

They will pull cash out of banks and hoard it in safe places. And they will seek the safety, anonymity and reliability of gold and silver.

Gold and silver have served as money for centuries.

Gold is the ultimate currency because it doesn’t rot or corrode…it is durable…easily divisible…portable…has intrinsic value…is consistent around the world…and it cannot be created from thin air. It cannot be debased by the government.

By enforcing negative interest rates and fighting a War on Cash, the government will create a huge underground currency market.

And the ultimate underground currency will be gold and its sister metal, silver.

Gold is trading for around $1,260 an ounce right now.

As the government blunders into a negative interest rate disaster, gold will likely rise 50%…100%…possibly even 200% higher.

There’s an underground currency market coming to your neighborhood.

If you own enough gold, you’ll be its king.

If you don’t yet own gold, buy it now.

If you own a lot of gold, buy more.

via Zero Hedge http://ift.tt/1TqXNLC Tyler Durden

Late last month, John Kerry and Sergei Lavrov celebrated a “temporary cessation of hostilities” in Syria.

Obviously, the “ceasefire” didn’t include ISIS, but more critically for peace, it didn’t include al-Nusra either.

Nusra is of course al-Qaeda’s Syrian arm, and what’s important to understand is that unlike ISIS, their positions are difficult to distinguish from those of the FSA and other rebel groups that are a party to the US-Russian agreement. As we noted late last month:

“While the ISIS presence is concentrated in eastern Syria, al-Nusra has positions in Aleppo City, the Jabal Turkman region of Northeastern Latakia, the Jabal Zawiya region in Southern Idlib Province, and the Quneitra Province along the Golan Heights. Just to name a few. That effectively means Russia can bomb anywhere along the country’s urban backbone in the west and claim to be targeting the group.”

By all accounts, that fact alone should have made the ceasefire a no-go but relatively speaking (and when it comes to ceasefires, it’s all “relative” in Syria) things actually haven’t gone so badly. Sure, more than 200 people have reportedly been killed, but according to “sources” (and we use that term very loosely because it almost always refers to one guy in London) Sunday was the “calmest” day yet, with “only” 14 people killed.

While we’re certain (and saddened) that hostilities will resume anew in relatively short order, we found the following images from the ceasefire to be interesting if only for the degree to which some fighters seem bored – almost dejected – at the lack of violence.

“War”, as Chris Hedges famously wrote, “is a drug.”

*  *  * 

“I learned early on that war forms its own culture. The rush of battle is a potent and often lethal addiction. Many of us, restless and unfulfilled, see no supreme worth in our lives. We want more out of life. And war, at least, gives a sense that we can rise above our smallness and divisiveness.”

via Zero Hedge http://ift.tt/220P5VS Tyler Durden

By EconMatters

The API Report Much Better than Expected. The EIA Report will be out tomorrow, focus on the U.S. Production Number – the most important element of the report. How many more EIA Reports until we break the 9 Million Barrel per day threshold in U.S. Oil Production.

via Zero Hedge http://ift.tt/1Xb4cbL EconMatters

Submitted by Koos Jansen via BullionStar.com,

While India’s gross gold bullion import in 2015 reached the third highest amount ever at 947 tonnes and gross silver bullion import reached the highest amount ever at 8,504 tonnes, the Indian government is perpetually trying to obstruct the populace from protecting their wealth.

Last week I was going through gold and silver trade data released by the Indian Directorate General of Commercial Intelligence and Statistics (DGCIS) and observed strong import of precious metals in 2015. At the same time I was reading the documents, news came out that stated the Indian government was to implement extra rules to hinder its people from buying gold. In my view, the situation in India is another perfect example of a government’s nonsensical fight against the economic tide. Central banks do it all time don’t they?

In an ongoing failure to understand what capitalism is about, the Indian government continues to “disagree” with its citizenry where savings should be placed. Whenever the Indian people increase gold purchases to secure their financial wellbeing, the government is keen to find new tactics to suppress this free market expression. The government aims the country’s wealth to be where it suits them – in the fiat currency they issue and control, but the populace believes fiat currency is inherently vulnerable and chooses physical gold for its long-term wealth preservation. It seems the more the Indian rulers resist private gold demand, the stronger the forces they’re fighting become. As we’ll see below, most undertakings by the government to keep its people from buying gold have been in vain.

First, let’s have a look at an overview of all the measures undertaken in the past years. At the end of the post I will present the details of the latest gold and silver import data (India mostly relies on import for its precious metals hunger).

When the price of gold made its famous nosedive in April 2013 Indian physical gold demand skyrocketed off the charts; in May 2013 India imported 165 tonnes of gold, the highest monthly tonnage ever. In reaction, the government decided in June 2013 to raise the import duty on gold from 4 % to 8 % and in August 2013 from 8 % to 10 %. In addition, in July 2013 the “80/20 rule” was implemented, forcing traders to export 20 % of all imported gold. The import duty on silver was raised to 10 % as well, although silver was not subjected to the 80/20 rule. The result was that by September 2013 India’s gold import through official channels had fallen to a mere 16 tonnes, but smuggling in gold had exploded. Gold trade was diverted to the black market with all due consequences – thriving criminality threatens social and economic stability – and India’s established gold industry organizations fiercely objected the government’s policy. Another consequence was that silver import has seen spectacular increases ever since (see further below).

Although heavily restricted, Indian gold import through official channels bounced of the lows in mid 2014. Eventually, the 80/20 rule was withdrawn in November 2014 while the Indian government was preparing a new trick: the gold monetization scheme, which was to “to mobilize the gold held by households and institutions in the country” and ”be able to reduce reliance on import of gold over time to meet domestic demand”. In my words, the scheme was intended to oversubscribe the people’s gold by exciting them to deposit their metal at commercial banks. The catch is that the gold depositor is technically lending his gold to the bank, whereby he risks losing his metal if the counterparty goes belly up – although these risks were not disclosed in the brochure. Ironically, the essence why people buy gold in the first place is protect their wealth, not to take risks (ie by lending). Not surprisingly, the gold monetization scheme has failed miserably.1– bear in mind, there is an estimated 20,000 tonnes of physical gold owned by the Indian private sector. It does not look like the gold monetization scheme will ever succeed in India.

Data from the World Gold Council shows Indian consumer gold demand accounted for 848.9 tonnes in 2015. Reasons enough for the Indian rulers to continue their hopeless quest to limit demand. In January 2016 the government introduced a rule that forces jewelry buyers to show a Permanent Account Number (PAN), which the vast majority of rural customers do not have, for any purchase above Rs 200,000. And it proposed the re-imposition of a 1 % excise duty. Remarkably, the excise duty was first introduced in 2012 but rolled back the same year as jewelers went on strike. This time around jewelers are seeking the same relief. Since 2 March they’re on strike indefinitely (speculating; the excise duty will not succeed).

Let’s head over to the most recent (final) trade data released by India’s customs department, the DGCIS. India’s gross gold bullion import in December 2015 was robust at 111 tonnes, up 9 % from November and up 218 % from December 2014. Total gross gold import for India in 2015 came in at 947 tonnes, up 22 % from 2014, the third highest amount ever.

India gross exported 11 tonnes of gold bullion in December 2015, down 22 % from November and up 35 % from December 2014. Gross gold export for the year 2015 aggregated to 150 tonnes, the highest ever, up 136 % compared to 2014. Gold bullion export might be elevated due to India’s increased refining capacity.

Net gold bullion import in December 2015 came in at 100 tonnes. Total net gold import for 2015 accounted for 797 tonnes, up 11 % year on year.

India’s gross silver bullion import was very strong in December 2015 at 1,042 tonnes, up 71 % from November and up 198 % from December 2014. Total gross silver import in 2015 accounted for a staggering 8,504 tonnes (!), up 20 % from 2014.

As, silver bullion export from India is neglectable, net import in December 2015 accounted for 1,041 tonnes and total net import for 2015 came in at 8,494 tonnes. The latter being 31 % of world silver mining output!

From looking at official precious metals import and demand numbers we can wonder if the many restrictions from the Indian government have accomplished anything to their likes. One thing is for sure; the Indian people did not substantially bought less gold – and did buy substantially more silver.

Instead of hopelessly resisting and intervening in the Indian economy, the government could also choose to allow free market forces and/or even support the people’s love for gold to bolster India’s gold industry for it to become a global powerhouse. Wouldn’t that be much more effective?

Kindly note, the cross-border trade tonnages for this post, calculated by myself and Nick Laird from Sharelynx.com, are based on the Rupee values disclosed by the DGCIS and the monthly average metal prices. The gold and silver bullion import and export figures mentioned in this post exclude smuggling and cross-border trade in precious metals jewelry.

via Zero Hedge http://ift.tt/1peKkdD Tyler Durden

Last week, we learned that vehicle leasing as a percentage of monthly light-vehicle sales hit a record in February at 32.3%.

In other words, a third of the over 1 million cars and light trucks “sold” during the month were leases, according to J.D. Power.

This is indicative of what is now a long-term trend. Have a look at the following chart from WSJ, which shows that since 2009, the share of monthly auto leases as a percentage of vehicle sales well more than tripled:

Of course the thing about leased vehicles is that they come back, and as WSJ wrote last week, “about 3.1 million vehicles will return to dealer lots off leases this year, up 20% from 2015 [and] the number will climb to 3.6 million in 2017 and 4 million in 2018.”

So what does that mean for dealers? Deflation. 

And what does that mean for the automakers? Hefty losses.

Nothing about this is hard to understand. You get a supply glut causing pricing assumptions for your existing inventory to prove wildly optimistic and you end up with giant writedowns.

This has happened before. “The auto industry expanded the use of leasing in the mid-1990s, helping to fuel retail sales of new vehicles,” WSJ recounts. “Eventually, a glut of off-lease cars sent resale values down and auto lenders who had bet residuals would remain high ended up racking up billions of dollars in losses, having to sell the cars for much less than they anticipated.”

Right. Nothing difficult to grasp about that. But the especially silly thing about the dynamic with auto leases is that it was the dealers and the automaker-affiliated financing companies that made the leases in the first place. In other words, it’s not like this was some supply shock that couldn’t have been forecast ahead of time. In fact, they knew exactly when the off-lease deluge would start, so it’s not entirely clear why they would have set optimistic residual assumptions.

Anyway, the cracks are already starting to show.

The Manheim Used Vehicle Value Index posted its largest Y/Y decline in over two years last month, falling -1.4% and -1.5% M/M. We’re now 3.5% below the peak. 

“All else equal, it puts pressure on lease residuals – though we note most fincos had assumed declining used vehicle prices in their lease writing,” Goldman said, earlier today. “Second, while improving inventory acquisition cost for the dealers, it may put downward pressure on the value of existing dealer inventories, which can be negative for used margins.”

Well yes, declining used vehicle prices “may” be a “negative for used margins” – in fact that’s almost a tautology. 

And of course falling used car prices means pressure on new car prices as well, which would be a shock considering 

Obviously, the scariest part about all of the above is that consumers still have the pedal to the metal (pun fully intended) when it comes to leases, which means there’s no end in sight to the off-leases and thus no way to determine, at this juncture, how big the residual writedown wave and deflationary auto industry calamity will ultimately end up being.

So, you know… “buckle up.”

*  *  *

Bonus chart: largest used car price decline for any February since 2008

via Zero Hedge http://ift.tt/1Sy1D4C Tyler Durden

Via ConvergEx's Nicholas Colas,

While the world’s central banks struggle with deflation, millennials (those born between 1980 – 2000) are busy creating a world where persistently lower prices will be an economic cornerstone.  “A feature, not a bug,” as they say in the tech world.

 

The immediate reason for that is simple: our cohort got stuck with educational hyperinflation, something economists miss when they look at the headline numbers. Education is only 6% of the CPI basket. For millennials, that number can easily exceed 20% because of student loans. We are therefore turning to a new tech-enabled service economy to help us make ends meet, and the majority of these new services are profoundly “Disruptive” to old business models.

 

“Disruption” is often code for “deflation”, since more taxis (Uber), hotel rooms (Airbnb), food delivery (too many examples to mention) means more price competition. And when the next wave of disruption comes along to put the current crop of “Disruptors” out of business, we’ll switch to them.  Deflation will be permanent, and we’re OK with that.  And when my cohort runs the Fed, or the ECB, or the BoJ, we will be unlikely to care if prices decline. We may even consider it the sign of a successful economy that serves its citizens well.

Note from Nick: Baby boomers know a lot about inflation.  We came of age in the 1970s, when food and gas prices rose so quickly that it was easy to come up short on cash at the checkout line. I still keep an extra $20 tucked away in my wallet because of those experiences. Jessica’s generation saw none of this, with the notable exception of educational cost inflation. Today she describes just how differently her demographic group thinks about price levels. And it is VERY different from the Boomers…

It’s no secret we millennials are pro multi-taskers when it comes to technology, and we’re often on our mobile phones and laptops while watching TV all at the same time. There is one device, however, of the three that is far harder for us to give up. No prizes for guessing which one:

• A recent Harris Poll of 2,193 U.S. adults surveyed in January shows that 61% of millennials name mobile phones as the most difficult device to unplug from, compared to television (21%) and computer/laptop (22%).
• That contrasts our parents’ generation – the baby boomers – with mobile phones nearing the bottom of the list (28%) and the top two spots going to computer/laptop (37%) and television (44%).

Dig deeper into the survey and the reasoning becomes clear, as the utility of mobile phones has increased dramatically during our lifetimes. For example, the survey notes that unplugging to the broader population means avoiding: social media (71%), the Internet (64%), email (58%), text messages (55%), mobile or tablet apps (55%), video games on consoles or handheld game devices (51%), computer games (50%), phone calls (48%), television (45%), eBooks (30%), and audio books (21%). People can participate in nearly all of these activities on mobile phones, and we’ve grown up with this benefit. So of course we’d opt for our cell phone over a TV or laptop – we can use it for all three functions.

The dominance of mobile phones and technology in our lives not only impact how we use our time, but how we spend our money. The Federal Reserve has based its inflation expectations on a relatively static basket of goods for decades, but millennials’ experience with inflation differs from our parents. Services replace physical goods, for example, while convenience gets baked into costs. Here are four variables that shape our inflation expectations:

#1 – Technology (Deflationary): When I go to the mall with friends, I rarely buy anything. Why? Because I know I can find whatever I like cheaper online. Merchants used to earn a premium for holding products customers couldn’t find elsewhere locally. Technology and the internet erase this premium and put downward pressure on the price of goods because they provide access to products all over the world, increasing competition and acting as an arbitrage.

 

For example, I’ll browse bookstores, but when a book peaks my interest, I’ll only take note of the title. Same goes for technology gadgets or devices. I know I can buy them from Amazon, for example, for a lower price, either from the site or another merchant the site hosts. I don’t even need to pay for shipping since I have a prime account, and receive my purchase in just two days. Like many other sites, Amazon’s business model hinges on maintaining competitive prices and making the consumer experience more convenient. In short, the internet offers ample price comparisons and serves as an effective platform to highlight promotional sales. Paying full price at the mall is rare except for last minute needs.

 

#2 – Sharing Economy (Deflationary): During my adolescence, I’d dedicate one category on my Christmas list to CDs. That was until iTunes came along and I could more affordably purchase single songs I particularly enjoyed. Now, music streaming services have totally changed the game. On Spotify, for example, I can make customized song lists and listen to them for a month, all for the price of less than a CD. A premium subscription to Spotify costs $10 per month versus buying a CD at Target for upwards of $15. You can even listen to music streaming services for free, if you’re willing to listen to ads and in shuffle play mode.

 

Here are some other similar examples. I don’t pay for cable because I can stream numerous shows and movies for only $8.99 a month on Netflix (in this case I don’t even need a TV since I can watch on my laptop or cell phone). I’m also able to travel a little more due to services like Airbnb, as I can find an inexpensive, comfortable place to stay. Lastly, many of my friends who live in the city don’t have a car because they can take an Uber if necessary. It’s like having a personal driver that picks them up where and at what time they want to get them to their intended destination. Bottom line: these examples show services substituting physical goods, enabling the sharing economy to act as a deflationary force in millennials’ lives.

 

#3 – Social Media (Weirdly Inflationary): I’ll be the first to admit, I often covet a friend’s new handbag or latest trip when I see pictures on Instagram. Has this inspired a few purchases or vacations on my behalf? I think you know the answer. Social media, in this sense, has created what you’ve probably heard of as “lifestyle inflation”.

 

“Keeping up with the Joneses” is nothing new, but platforms like Facebook have taken it to a new level. Everyone you know or connect with on social media can view your life more intimately than ever before, even if they live halfway around the world. A Facebook or Instagram account, for example, gives people the opportunity to portray a glamorized life. This creates competition, and may spur more expensive purchases than some individuals would have otherwise pursued. This includes everything from clothes to experiences in order to show off on the web. We also value peer reviews on products and restaurants, and will heed these opinions to attain a better quality product or service. All in all, social media is inflationary as millennials try to match or outdo each other’s lifestyle, and is a seamless advertising medium.

 

# 4 – Convenience (Inflationary, but by choice): I don’t know about you, but I dread going to the supermarket. Having to navigate through crowds and carve a chunk of time out of my busy schedule is less than ideal. That’s why I will gladly pay a grocery store delivery service to do it for me. I know I’m not alone on this front in light of the plethora of startups launching delivery services related to everything from groceries (Instacart)  and laundry (Cleanly) to alcohol (Saucey) and takeout (GrubHub). Some apps only serve certain cities, but larger companies are working to fill the void elsewhere. Amazon, for example, shows this in its effort to deliver by drone or its own trucks. They are also working on making delivery times faster with Prime Now, a same-day delivery app. Bottom line here: we’ll pay extra for convenience (inflationary), but expect this premium to abate overtime as we transition to a more on demand economy.

In sum, millennials’ inflationary basket isn’t as simple as weighting goods within large standard components like food, housing, transportation, and entertainment. Student loans, obviously not directly in the Consumer Price Index, account for one of our largest monthly payments. We therefore can’t afford a house, and a lot of us live with our parents as rental costs continue to climb. Many also can’t afford a car, in which Uber proves especially helpful. That’s why we depend on services that provide access to goods without requiring ownership. This keeps expenses low and convenience high. We care about what our friends think and have serious FOMO (fear of missing out), so we’re less reluctant to save and more inclined to travel or buy new clothes when we can. Fortunately, however, technology and startups continue to bring costs down as we benefit from each other’s contributions online and in the sharing economy. In this sense, we are more privy to the deflationary impact of technology and services, in contrast to our parents’ experience with inflation of physical goods, such as food and gasoline.

Now, I realize economists wouldn’t consider the four themes I outlined as actual inflation or deflation. They simply show how my cohort experiences price pressures that inform our thinking on the topic. This is important, however, for policy going forward as it could alter the Fed’s dual mandate on the inflation side. The expectation of deflation is already incorporated in millennial psyche, so it doesn’t necessarily delay spending as seen in Japan. We adopt technologies that force deflation. Therefore, in our world, deflation is the mark of a healthy economy. 

via Zero Hedge http://ift.tt/1TqM67A Tyler Durden