What is the difference between deflation now and that during great deprssion? What can you do to protect yourself?
Fred Day
Feb. 20, 2007

The economy is headed for a serious slowdown accompanies with deflation in most sectors. The last time it happened was in 1929-1934. It was the time of great depression. There are many parallels between the great depression and now. There are some significant differences too. Are you prepared to handle the differences?

The first difference is the stealth nature of the deflation. The deflation is there since 1988 but no one can feel it except computer models tracking price deflators that considers wages, commodities and assets. The deflation has cycles. A sector goes hyperinflation and then bubble bursts into deflating contraction. Tech sector saw it year 1995-2000. Real Estate saw it from 2001 to 2006. The financial services sector saw it from 2002-2007.

The second difference is slow nature of contraction and deflation. In 1929, it came, happened and disappeared like a storm. Now it is elliptical in top formation, happening over decades. The current form does not get corrected because it is caused by debt.

Smart investors are doing everything they can to loan money out. In deflation timer, steady guaranteed interest rates are the best you can have. All asset classes deep in price. Any income is actually great. In recent days you may seen the eagerness to give you a credit card, give you the home equity line and so on. The smart players know that deflation is there and they are eager to loan you against your home. They know you will do what ever it takes to keep your home.

You must get out of debt at any cost. The moment you do that, during prolonged deflation, you will get rich.

What is the difference between deflation now and that during great deprssion? What can you do to protect yourself?
Fred Day
It was the time of great depression. There are many parallels between the great depression and now. There are some significant differences too. Are you prepared to handle the differences?
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