{"id":8483,"date":"2010-04-12T13:30:28","date_gmt":"2010-04-12T17:30:28","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8483"},"modified":"2010-04-12T13:30:28","modified_gmt":"2010-04-12T17:30:28","slug":"market-myths-exposed-inflation-is-not-a-threat-deflation-is","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/12\/market-myths-exposed-inflation-is-not-a-threat-deflation-is\/","title":{"rendered":"Market Myths Exposed: Inflation Is Not A Threat, Deflation Is"},"content":{"rendered":"<h3><span style=\"font-size: small;\">Our free eBook reveals the  10 most common financial misconceptions<br \/>\n<\/span> <span style=\"font-size: small;\"> <\/span><\/h3>\n<h3><span style=\"font-size: small;\">By Nico Isaac <\/span><\/h3>\n<p>Most people are confident they  can recognize                  a myth when they hear one: Wearing a hat causes  baldness; eating                  a bunch of carrots gives you perfect vision; &#8216;light&#8217;  cigarettes                  are better for your health than the regular kind.<\/p>\n<p>But what about this sentence:  <em>Inflation                  is the number one threat to the US economy? <\/em>Ask the  mainstream                  experts, and this statement is in no way a fabrication  of the                  truth; it is truth itself. Case in point, this recent  insight                  from a reputable news source:<\/p>\n<blockquote><p><em>&#8220;Given the extraordinary                     amounts of government spending, we believe inflation  is likely                    to rear its ugly head.&#8221;<\/em> (CNBC)<\/p><\/blockquote>\n<p>It looks reliable. It sounds  reliable.                  But the reality is different. That fact is the subject  of Chapter                  Three in Club EWI&#8217;s free educational eBook <strong><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa94&amp;dy=aa040910&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1361\"><em>Market                   Myths Exposed<\/em><\/a><\/strong>, aptly titled <strong><em>&#8220;Myth  No.                  3: Worry About Inflation Rather Than Deflation.&#8221; <\/em> <\/strong><\/p>\n<p>With groundbreaking insight  from EWI&#8217;s                  president Bob Prechter, this chapter reveals how the  most vital                  financial players have been led right up to the water of  easy                  money. Yet, like the saying goes, no amount of incentive  &#8212; be                  it record low interest rates or trillions of dollars in  federal                  bailouts &#8212; has gotten them to &#8220;drink.&#8221; Here, the <strong><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa94&amp;dy=aa040910&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1361\">&#8220;Market                   Myths&#8221;<\/a><\/strong> chapter sheds light on this global leverage  fast:<\/p>\n<ul>\n<li><strong>Banks:<\/strong> The premier dispensers of  credit are                    about &#8220;95% invested in mortgages,&#8221; which can fall                    in dollar value at the start of a crisis. Also, a  chart of Credit                    Standards At All Banks since 1997 reveals a new trend  of tighter                    lending criterion. Both are deflationary.<\/li>\n<\/ul>\n<ul>\n<li><strong>Consumers:<\/strong> The premier devourers of  credit                    are paying off their balances. See: chart of Total  Consumer                    Credit (Annual Rate of Change) since 2000. This is  deflationary.<\/li>\n<\/ul>\n<ul>\n<li><strong>Private Equity:<\/strong> <em>&#8220;Of the ten  largest                    leveraged buyout deals since 2007, four have defaulted  and two                    are in distress. Just in this small group, there is  nearly one-half                    a trillion dollars worth of loans headed for the  dump.&#8221; <\/em><\/li>\n<\/ul>\n<ul>\n<li><strong>Small Businesses <\/strong>are  self-liquidating; meaning,                    they create profits to pay back loans versus  consumers. YET,                    &#8220;Market Myths&#8221; Chart of Bank Loan Availability to                    these small Enterprises contains a big, black arrow  pointing                    DOWN. This is deflationary.<\/li>\n<\/ul>\n<ul>\n<li><strong>Home owners:<\/strong> Real estate values  continue                    to fall, foreclosures continue to soar. Mortgage  delinquencies                    are rising, and more and more people are walking away  from their                    properties. All of these conditions are deflationary.<\/li>\n<\/ul>\n<p>Six pages of riveting charts  and commentary                  later and there&#8217;s no putting the pieces of this  shattered myth                  back together: One by one, the key players in the  creation and                  expansion of credit are adopting a stance of  conservation and                  conservatism. This ultimately leads to a decline in the  value                  of outstanding debt &#8212; a precondition of deflation, not  inflation.<\/p>\n<p>Believe it or not, this is  just the                  beginning. In all, <strong><span style=\"text-decoration: underline;\"><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa94&amp;dy=aa040910&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1361\"><em>Market                   Myths Exposed<\/em><\/a><\/span><\/strong> throws light on the TEN most  common financial                  misconceptions via excerpts and charts from EWI&#8217;s most  popular                  editorial material of the last decade. Such as:<\/p>\n<ul>\n<li>Myth No. 1: Earnings Drive Stock Prices<\/li>\n<\/ul>\n<ul>\n<li>Myth No. 5: To Do Well In Investing, You Have To  Diversify<\/li>\n<\/ul>\n<ul>\n<li>Myth No. 8: Bubbles Can Unwind Slowly<\/li>\n<\/ul>\n<p>The complete, NO-COST report is just a Club EWI sign-up  away.<strong><span style=\"text-decoration: underline;\"> <a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa94&amp;dy=aa040910&amp;url=http:\/\/www.elliottwave.com\/club\/market-myths-exposed\/default.aspx?code=38290%26articleid=1361\">Simply                   click here to get started.<\/a><\/span><\/strong><\/p>\n<div><strong><em>Nico Isaac <\/em><\/strong><em>writes for  Elliott                  Wave International, a market forecasting and technical  analysis                  firm.<\/em><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Nico Isaac &#8211; Most people are confident they can recognize a myth when they hear one: Wearing a hat causes baldness; eating a bunch of carrots gives you perfect vision; &#8216;light&#8217; cigarettes&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-8483","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8483","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=8483"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8483\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8483"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}