Biden Follows Trump's Lead With Surprise Trip
Italian Skit Brutally Mocks Joe Biden's Mental Decline
This Insider Account of New York Times Leftist Insanity Is Something Else
A Government Shutdown Looms Friday
RNC Chair Announces Resignation, Here's When She'll Step Aside
We Now Know Who Was Behind That Fake Biden Robocall
Trump Picks Up Key Senate Endorsement After SC Primary Victory
Here's What the US Airman Who Set Himself Ablaze in DC Was Protesting
'Is That Legal?': Why One Section of Microsoft's DEI Report Is Raising a...
The ‘Rule of Cool’ Triumphs in Helldivers 2, and the Left Doesn’t Get...
Here’s What Gavin Newsom Said About Third-Trimester Abortions
And You Call That America?
Here’s How One San Francisco Store Is Handling Rampant Shoplifting
The UGA Murder: An Outrageous Cascade of 'Progressive' Failures
This Bombshell Discovery Could Be the Doom of Fani Willis

The Deflation Situation

The opinions expressed by columnists are their own and do not necessarily represent the views of

These days, investing is really quite easy from the standpoint of only having to make one of two choices. 

In order to make that choice, you must answer the following question: Are we in an inflationary or deflationary environment? 


Your answer will determine how you invest your money.

If it’s inflationary, buy stocks, junk bonds, commodities, precious metals, and real estate. 

If it’s deflationary, buy treasuries; keep a lot of cash, and short the following: stocks, junk bonds, commodities, precious metals, and real estate.  Simple, right?

As a CFP, I see most people choosing inflation. 

After all, hasn’t their grocery bill jumped dramatically in the past year?  What about those gasoline prices? 

In most people’s minds, the immediacy of what hits their pocketbook on a daily basis influences their investment decision. 

As an economist, I’m driven by supply and demand.  If there is a greater supply than demand, the price will ultimately reflect this imbalance. 

Banks, governments, and speculators, have often times tried to usurp this economic principle, only to see their efforts ultimately fail.  Housing, employment, and wages continue to spiral downward, thus supporting the case for deflation. 

So, it comes down to the tiebreaker, the small businessman. 

As a golf course owner, the number of people applying to cut grass on my course has tripled over the past year, thus allowing me to reduce wages. 

However, in order to stay competitive, I have established reduced specials on my greens fees, which ultimately lowers my income. 

Unfortunately, my golf carts are gasoline driven.  Watching oil recently decline from $114/barrel to $90/barrel (down 21%), is a positive.  Lower wages, lower revenue, oil costs (first rising then falling), all add to the deflation case.  


 File:Median and Average Sales Prices of New Homes Sold in the US 1963-2010 Monthly.png

So, for me, deflation is the overwhelming winner. 

As long as commodity prices stay elevated, the inflationists will still stick to their story. 

Ultimately, and perhaps grudgingly, they too, will see the light and become deflationists.

See also these top stories
George Friedman U.S. and Pakistan: Afghan Strategies
John Ransom O's Surge a Giant Sucking Sound
Carrie Schwab Pomerantz Times Like This Call for Big Picture Thinking
Bill Tatro The Deflation Situation
Chris Poindexter Record Profits, Record Deficits, No Jobs
Mike Shedlock Berkshire, Citi, BAC: Dead Money for a Decade
John Ransom Government Needs a Low-Obama Diet

Click the Townhall Finance blog The Ticker for daily commentary on money and markets.

Join John Ransom on Facebook and follow him @Twitter 


Join the conversation as a VIP Member


Trending on Townhall Videos