For example, Charles I of England. There is no doubt that cash has been good to hold over the past year, US dollars and yen especially as everyone squared their accounts.
But Morgan Stanley doesn’t believe in deflation, and neither do I.
Although headline prices likely will decline sharply in coming months, underlying inflation over [...]
The next leg is the impact on the real economy of tighter credit standards, banks needing to raise capital and trim their loan books, and consumer wealth effect from falling house prices driven by increasing foreclosure backlogs… less money all around.
…Weaker spending by upper-income consumers, supposedly immune to credit problems tied to the subprime crisis, has already begun to appear in the form of weaker sales at high-end jewelers like Tiffany and higher default rates on credit cards issued by American Express.