Three topics are provoking quite a bit of discussion these days among the pundits: 1) the odds of recession; 2) the supposed inflation/deflation conundrum, and 3) likely moves by the Fed in the months ahead. As far as we're concerned these are all non-issues, and debating them is just navel-gazing. To dispense with the first, the recession has already begun; it is perhaps only government statisticians and CNBC commentators who cannot sense it viscerally, as the rest of us already do. Talk to someone who works in retail if you'd rather not take our word for it. And keep in mind when you do that consumption accounts for more than two-thirds of this country's GDP. Concerning whether it is inflation or deflation that is more likely to do us in, that's like asking, as an asteroid hurtles toward Earth, whether it will be the asteroid that wipes us out or some microbe that lives on the asteroid. On this matter, you should consult your realtor if there are any doubts, since he or she is probably close enough to deflation's ground zero to be praying for a little of the opposite. It's just simple math. How much inflation do you think the Fed can promote with real estate prices collapsing and a $510 Trillion derivatives bubble about to do the same? Your realtor will know this intuitively, since, as we implied above, he or she has been living on the very cusp of deflation. Black Swan, or Turkey? As for what the Fed may or may not be about to do, there was a cockamamie theory floating around on the Internet yesterday that the 'black swan' event that would surprise us all, triggering a stock-market collapse, would be a move by the Fed to raise rates. Yeah, sure. That's about
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