Sunday, October 17, 2010
While waiting for the computer to work itself through the data, I shall write down my thoughts. Following Mangan's very pessimistic note on his country, which apparently reflects the general ambiance, I think that America may be in danger of falling into deflation. Deflation is a mass psychological mood of loss of faith in the future, fear to start new things, avoiding new experiences instead of touring the world's seven marvels. In a deflationary environment people will not even go out to the street to pick up dollar bills laying on the pavement. Banks are pushing loans at 0% interest and people is not taking them. Once national pessimism sets in, it may last a generation.