Why Inflation vs Deflation Is Missing The Point
With precious metals surging and mainstream Americans being forced to acknowledge the threat of inflation (after having their heads in the sand for years), the topic of inflation is on the lips of many. For years, the debate has been whether we’re going through inflation or deflation. The question doesn’t tell the whole story, because you need to clarify the currency by which we might be inflating or deflating.
The reality is that we are going through massive deflation when things are priced in sound money. Things are getting cheaper if you price them in gold or silver. You can buy a house for far fewer ounces of silver and gold than you could a few years ago.
Or how about the stock market? Here’s the S&P 500 priced in silver:
Yes, we have inflation. Yes, things are getting more expensive. But, only in dollars.
Why? Because dollars are being debased. Our burdened economy is actually getting cheaper which is the normal market response for an over-indebted economy due for a correction. It’s getting cheaper in real money.