patrick.net

A lot is being said about inflation that I no longer buy into. The price of oil has been a favorite of mine, because it seems to me that we can do without oil in my life time. The price just keeps bouncing up like a bubble http://chartsbin.com/view/oau

Of course the price or oil makes everything more expensive, but as you see from the chart we had a long period where the price per barrel went way down, but I don't recall the price of everything else falling with it.

That's an example of speculation, and I think we are in a period of massive speculation today.

However that pales in comparison to what it costs to run a business today. Taxes, for sure, are too high on small business, and the tax breaks for corporations are way too generous. The real problem though is financing. Fewer, and fewer successful businesses today are cash. You need to take credit cards, or debit cards. Most businesses need to borrow to compete, at some point in an expansion.

Then we have Venture Capitalists that come in, drive up the price of goods so the company is more profitable, then get out, by sale or bankruptcy.

It all adds to the cost of goods, and services, but is that inflation?

Will the price of assets, goods, and services deflate because the consumer is paying debt in real dollars of value, rather than inflated dollars?