Dangerous Deflation Levels

ppi deflationLast month, many threw out the notion of the fear of deflation due to higher than expected PPI and CPI numbers. I cautioned at the time, that there were still many other contributing factors pointing to a deflationary down spiral and that one month of positive growth was nothing significant. On Tuesday, PPI numbers once again came in worse than expected with a NEGATIVE trend (-.9%). Sure, there is a lot of influence with the radical movement of energy prices as of late (which will require some more analysis), but such numbers have us flirting with serious problems.

Housing Starts also disappointed the market's expectations as new development is still severely struggling. Despite these very critical readings, however, the market is still finding some way to go up the last couple of days. Still, volume remains very low as most investors are finding it safer to hold onto their cash at this point. I believe we are week, maybe even days away from the big turn in the market. I will make sure to keep the site updated much more during this critical time. Happy Trading.


  1. Anonymous Says:

    You have said this before... "We are very close to the big turn in the market." You have been wrong time and time again. You post nothing on positions that you have anymore nor do you give really any insight on the market. What you report is what we already know through just watching CNBS. Show me some of the reasons why I started to read your blog over a year ago! Man, I just feel like deleting this board from my bookmarks... but I keep hoping I will see something I would be interested in.

  2. Finance Fanatic Says:

    As of late I havent' made a lot of moves, its been a long 3 months with slow deterioration. Some critical things happened this week and you can choose to delete this board. I will give updates on my portfolio when they are updated.


    Inflation is the killer not deflation.