Here’s an endearing lead from the Wall Street Journal’s Tuesday evening wrap-up: “Surging oil and a dipping dollar sent a shudder through U.S. stocks today. Though many analysts downplayed the seriousness of the day's moves, the  moves offered a peek at some of the worst-case risks confronting the markets.”  And just what was it that we glimpsed? In the view of a Charles Schwab trader quoted by the Journal, the “worst case” means inflation and higher interest rates.

Ya gotta love these guys.  The Second Great Depression may be no further away than a downtick in real estate values, yet the pundits are getting all het up yet again about a supposed threat of “inflation.”  I keep having to remind myself that rampant inflation has become all but impossible now, if for no other reason than that it would rescue five hundred million besotted debtors from the hellfires of Murphy’s Law.  Yes, we’d all like nothing better than to have our homes rise in value to a quadrillion dollars, even if our paychecks were to go up during that time by a mere 100,000 percent. But let’s not get our hopes up. Niggling signs of satistical inflation will doubtless remain to distract us until the day debt deflation begins to implode. By then, even business TV's talking heads may have grasped what the "worst case" actually implies.  

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The Un-CNBC

Below, I have reprinted the simulated interplay of two first-rate thinkers, Marc Faber and Bob Bronson. Bronson, of Bronson Capital Markets Research, has been quoted here numerous times in the past. His comments are bracketed in blue. Although both men see deflation as a threat to the U.S. and global economies, Bronson has been more steadfastly in the deflationist camp. His long-term forecast is based on Kondratiev cycles that have already moved into their prolonged, deflationary "winter" phase.

(Click on text to enlarge)