Stag-deflation is when a recession is associated with deflation. We are definitely in a recession (at least since September 2008). The stock market is clearly deflating as it has lost about 50% in the last twelve months. Real Estate has declined about 20%-30% in various markets. This doomsday scenario could happen if the absence of Fiscal and Monetary leadership continues in the Obama administration.
Please read a previous blog where I asked President-elect Obama to act now and restore confidence in the markets. We cannot wait until January 20th!!!
Random notes...the Real Estate Investment Trust stocks are trading as if their tenants will not pay any rent in 2009. I guess the big three auto companies will face bankruptcy next year...we have to stop assets from deflating soon or it will be too late for all of us...watch for more layoffs and massive unemployment increases next year..
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