Newly-
In a big deflation there are all sorts of unintended consequences and things never unfold the same way twice, but you may want to rethink the hyper-inflation scenario for the following reasons...
1. During the Great Depression, the governemt actually paid farmers not to grow crops in an effort to push prices up. Right here in Connecticut I know farm families who were paid not to grow tobacco. So, don't be too sure that food prices have to go through the roof. They may surprise you.
2. People's answer to limited funds and daunting auto and home prices is to cut back. Could we have cut backs in food consumption. You bet. Some of the most popular sites on the web now feature old folks (Depression babies) showing young people how to feed a family of six on a buck! The answer to higher food prices may be a collective "push-back."
3.Lastly, go back once again to the definition of inflation--"Too much money chasing too few goods." Do you really see that around you? I don't. If anything, I see too little money chasing too many goods. That's why China has closed 70,000 factories recently. We have overbuilt, overmanufactured and overborrowed and it will take years to wring these excesses out of the system.
schloss (Kevin Murphy)
