Your confusion fundamentally derives from your assumption that cost push inflation and deflation are the primary determinants of economic outcomes and health. Rather debt load and international capital flows are much more powerful factors. This generative essence point is what makes Armstrong's analysis so much more reliable than the other bozos who claim to be economists.

That is a good point to raise and attempt to clarify. The USA will be experiencing deflation of imported goods cost (USA being a significant net importer) simultaneously experiencing a net inflation in asset prices (especially the stock market) because of a net gain in the capital account (ingress of international capital as the carry trade tide of QE comes back in). Simultaneously exports will be experiencing deflation both due to increase in cost of exports for importers and the collapse of the international markets which are short the dollar ($9 trillion international dollar loans from carry trade due to ZIRP from QE). So from 2015.75 to 2017.9, mainstreet USA will be experiencing deflation in both costs of imports and income as export industry collapses. Wallstreet USA will be experiencing asset inflation and increases in net worth. Again the rich class is victorious both on the egress of QE and again on the ingress reverberation effect.

Other significantly net importing countries which are not pegged to the dollar (e.g. not Hong Kong) such as the PIIGS, UK, France, and India will be experiencing basic goods cost increases thus mainstreet experiencing inflation at the same time their economies are collapsing due to debt defaults as the QE carry trade reverses and a liquidity crisis envelopes, i.e. stagflation or deinflation. The net exporting countries have a slightly better buffer zone but will eventually get caught in the contagion of deflation and stagflation/deinflation.

In short, a contagion of pain of deflation of income and jobs every where, and even some basic goods cost inflation in Europe and India. China is also allowing some goods cost inflation to kick in by allowing some subsidies to default (which they absolutely must do or it will be forced on them Minky Moment style or already is).

The only upside are the rich who ride the last bond bubble to October, then ride the dollar and US stocks stampede to 2017, then after that the USA falls completely into deflation too and the world goes FUBAR.

From 2018 to 2020, it is going to be waterfall collapse every where, and the only assets rising will probably be the shit the government can't grab, perhaps crypto-coin and gold, but the government will likely attack all the gold dealers thus I think crypto is our best bet. Technology and nerds have an inherent advantage over the government. We can outsmart them. They are too slow. We innovate too fast. They have no clue what we did until years after we did it. Then it takes them another 5 - 10 years to get all the other governments organized and unified. Gold is an old relic they know how to attack. A Treasury official said some years ago, "we will burn the fingertips of the goldbugs up to their armpits". (that might have been Larry Summers or Time Geithner or more likely Robert Rubin)


Not likely again before 2032. The political climate in the USA will have changed so much by 2017.9, it will be impossible for them to get away with another QE. The problem is confidence. Once the people have decided to exit stocks and put their cash under their mattress, then the Fed is powerless. What the government will have to do instead is stop people from getting cash to put under their mattress. This is why the coming attack on cash, capital controls, bail-ins, nationalization of pension plans, etc..

The shit coming is going to make you wish for QE. But your prayers will not be answered.

I have been trying to take the bull by the horns and work on the crypto-coin attributes we will need coming 2017ish.