Tuesday, October 6, 2009

America on sale

This is In-Your-Face deflation that has not eased for a while now.
AP News, by Rachel Beck

" Prices on everything from clothes to coffee to cat food are dropping, some faster than they have in half a century. Items rarely discounted - like Tiffany engagements rings - are now. The two biggest purchases most people make - homes and new cars - are selling at steep price reductions.

Traditionally, manufacturers and retailers lowered prices to clear inventory. Today, they're cutting prices because consumers are demanding it. If it lasts, the ramifications will be wide-ranging.

Retail sales remain sluggish, and more than half of the people surveyed recently by America's Research Group and UBS said they are shopping less.

Homes in parts of Detroit are cheaper than a new car.

Overall, prices are tumbling at the fastest rate in decades. The government's Consumer Price Index, which measures the average price of goods and services purchased by households, has fallen 1.5 percent over the last 12 months. The reading for July showed a 2.1 percent annual decline, the biggest since 1950 "

The world, lead by US, remains in a credit/monetary contraction phase, while inflation has remained positive in New Zealand. This really hurts over here. People are losing jobs left and right, and everything just keeps getting more expensive (as inflation kicks in).

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