Thursday, October 16, 2014

High Energy Prices Are Deflationary

As I've stated in the past. It seems to me that high prices of energy are in and of themselves deflationary. This is counterintuitive. But lower energy will stimulate people to move about and do things. And as they do this they spend money and get creative ideas. And then they borrow.

As long as this latest downtrend in energy prices is due to oversupply that is a good thing.

This may be the headfake traders are always on the lookout for. That last whiff of deflation sentiment that signals a bottom in prices......

I have always contended that high energy prices were deflationary.

Control your risk,


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