This is from April 2009, but in light of recent data points, I thought it was worth revisiting:


Source: Jess Bachman via Mint

Category: Digital Media, Inflation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

50 Responses to “Visual Guide to Deflation”

  1. rktbrkr says:

    Don’t do something – just stand there!

    Let me see, the #1 asset of most households going into a free fall, that negative wealth effect should stimulate consumer spending and help the job market. Just think if BB applied the same free market approach to the stock market – tough love for asset holders all around, prices are just too damn high! We need the shock treatment of dramatically lower asset prices to keep this recovery on track!


    BR: We went over this article earlier today, in case you missed it.
    I am not certain you will see the nuance of the reasons to let housing fall to its actual price level….

  2. septimus says:

    According to what I have read about the era of Alan Greenspan, the prices of all assets are currently distorted so severely due to extreme levels of debt everywhere that deflation is truly necessary a this time.

    The “Deflationary spiral” does not go on forever.

  3. nickgogerty says:

    Very cool, but um shouldn’t it be in Manga form with a Japanese example. Oh and a hint that house prices declining already represent serious asset deflation.

  4. Machiavelli999 says:

    I am surprised there isn’t a chorus of gold bugs and Austrians telling you how this is all wrong.

  5. Machiavelli999:
    Because they can’t prove they are right. And hopefully they are out grilling right now. ;-)

  6. dead hobo says:

    Good theory and great campfire scary stories but, in reality, not all dis-inflation is deflation. If a bubble bursts and prices fall as a result, is that deflation or normalization? The Fed would trot out the deflationistas and proceed to scare the crap out of everyone with logic such as the above, and continue to pump the price of everything in ‘controlled’ and ‘intelligent’ and ‘managed’ inflation. Which is supposed to be good, pure, and as God intended it.

    In reality, prices will stabilize at some level if the Fed provides enough liquidity and credit remains available. People aren’t potted plants. Prices don’t fall to zero. People will start to buy when prices fall to levels that match income and wealth. The Fed has no control over income but, I suspect, tries to manipulate wealth by pumping the stock market and making liquidity available to market pumpers. It hopes to influence incomes by influencing wealth caused by inflation.

    In reality, the Fed is addicted to inflation, and is only against the inflation it doesn’t think it controls. Deflation, aka price normalization, is the economy repudiating the Fed’s manipulations and perpetual bubble orientation. Price normalization is the economy telling the Fed it screwed up. The Fed counters this by treating price recovery as a terrorist. The resulting pumps keeps prices too high to match incomes and adjusted wealth.

    Thus, the Fed is the enemy of this recovery and prolonging the recession by fighting the normal corrrection to its 20+ year inflation binge.

  7. stonedwino says:

    So its either massive government spending or we are totally screwed….OK. Since you have outlined what happens if we cannot stop a deflationary spiral and that as we all know the only way to stop us from going into a black hole is government spending….why would anyone vote Republican now? And if the GOP makes gains in the House and Senate what will they do to help fix the mess they helped get us into in the first place?….Yeah right…

  8. algernon says:

    Barry are you endorsing this idiocy?

    Where is the actual example of a deflationary spiral? Don’t say Japan; prices flat even for 2 decades is not a deflationary spiral.

    A bust can cause sharp deflation, but in a free society–ie, free of blankets of gov’t intervention to prevent price adjustment [USA for example], it is self-correcting. The ratio of money/goods prevails.

  9. stonedwino says:

    Not to say the the Democrats are doing a stellar job – they should be doing more with the majorities they have – with or without Republican obstructionism…

  10. dead hobo says:

    BR, thanks for the softball slow pitch. This ‘deflation’ crap is so easy to debunk, there should be a price of admission just to throw feces at it. I really don’t understand why so many otherwise smart people can’t differentiate between price normalization and text book deflation theory. Then, after thinking through the obvious, why don’t they follow the trail back to the source and ask the Fed why it keeps pumping the price of everything as a matter of routine. Then ask why prices that don’t match incomes are a good thing, meaning why don’t they just let prices fall. Then, they can pump again from the bottom if they choose and start another 20+ year bubble cycle.

  11. foxorrabbit says:

    When I read: “Whoa. There has got to be something else that can be done. You know, besides the Fed…”

    I thought for sure the answer was going to be: “Well there is, the government could print a little money (NOT borrow it, just print it) and pay some of its bills with this newly-printed money. Taxes could be lowered because the government would be printing some money instead of borrowing it, which would put more money in people’s pockets, which would spur more economic activity. Eventually, prices would rise and the government could stop printing and go back to borrowing money from the banks.”

    Instead we get the sheople answer: the same thing as above but with the government asking banks to print the money and loan it to them at interest, instead of just printing it themselves. What a joke.

  12. markd says:

    I emailed this to 5 people & got back 5 this is wrong. when I asked for particulars I got 4 it just is and one Glenn Beck says so buyin’ more gold. jeez it’s a good thing I got lots o’ beer.

    @dead hobo you’re right there is a difference between deflation & price normalization, but when UE is 10%+ it’s a real thin one.

  13. Michael M says:

    I never understood this idea that people won’t buy things when they know they will get cheaper in the future. Really? No gas for your car now, no food, no hair cut, no AC, no college, no healthcare, no cable, no holiday if it’ll be cheaper next year? I guess with this kind of logic nobody buys clothes at full price because they know there will be a sale soon, nobody buys electronics because they only get cheaper if you wait, and nobody moves out of the dorm or their parents basement if houses are expected to get cheaper in the future. This is the kind of ceteris paribus-assuming, formula-driven logic that only economists can love: A world where all prices go down together and price alone dictates behavior, where lower prices do not free up money to buy other things, where globalisation is not a factor, where deflation does not force companies to achieve world-class productivity and where all deflation leads to downwards spirals that must be avoided at all costs. BS!

  14. JT23456 says:

    I’m all for a big dose of deflation. I’m retired with $1M in CDs. Both houses paid for. I drive a 99 pickup. Deflate away please.

  15. willid3 says:

    i suppose the great depression really never happened. and food prices never collapsed after all every one needs to eat right?

  16. Hamilton says:

    So, “massive government spending” magically creates jobs and income. How wonderful. This should be read to all children at bedtime!

    Unfortunately, in the real world, government spending of moderate or massive amounts means spending the incomes or wealth of taxpayers. Strange they leave this part out. Let’s forget the part where we tax incomes, properties and activities to pay it all back whether next year or next generation.

    There are some merits to the stimulus argument in concept, but not when study after study shows our own government stimulus expenditures are negative return “investments” that generate less income even over the long term and even with absurdly low interest rates on the borrowing. Bottom line is deflation needs to happen in real terms for certain asset classes, including housing in most locales. If we all bear the full present value cost of our retirement years, savings needs to be much closer to 20% and the only way to get there reducing 1)consumption, 2)housing or 3)taxes.

    It is true inanity to devise public policy promoting increased spending on consumption and housing with borrowed money.

  17. george matkov says:

    Barry, Barry, Barry,

    Unlike the time of the Great Depression, today’s population consists of tens of millions of retirees on fixed income. A general lowering of prices would increase their purchasing power and stimulate spending.

    Unlike the young, old people have to listen to the ticking clock of life – i.e., that trip to Bali may be cheaper in a couple of years but I might be dead by then, or too decrepit to enjoy it as I might were I to do the same today.

  18. Dow says:

    I expect deflation will get markedly worse this fall. The Christmas shopping season a complete bust. I am hoping to be wildly wrong.

    Back in pre-historic times, basic economic policy was presented in college that during booms, taxes should increase and savings encouraged. During busts, taxes should decrease and savings spent, generally on government projects. At its most basic, it’s how humans can best deal with feast and famine scenarios – a concept rehashed by just about every civilization since human beings first managed to chisel some marks on a stone.

    So what I really don’t understand is why, thousands of years later, there’s still any debate about what actions to take. To maintain social stability, during a famine, you feed people. The famine we face today is deflation. The best course of action against the zero bound – create jobs.

    PS Not a big fan of the new $50 billion transit spending bill proposed by Obama as the funds will in all likelihood go to a handful of defense contractors who handle civil infrastructure. Conveniently timed with a drawdown in Iraq. But I guess it’s better than nothing.

  19. X on the MTA says:

    I’ve written about this before, I’ll reproduce the relevant bit below:

    American consumers collectively owe 830.8B in revolving credit alone. People buy stuff on their credit cards with 14% interest rates. 631.8B worth of stuff. In his speech linked above, Bernanke defines moderate deflation as “a decline in consumer prices of about 1 percent per year” when talking about Japan. You know how much cheaper that stereo would be if you waited a year instead of paying for it with a credit card (assuming one year to repayment)? 14%. Hell, maybe even more as some new, fancier stereo comes out.Does this sound like the kind of population that will outright stop consuming and let the economy collapse over price declines that are a couple of points?

    People buy new cars or change leases every three to five years. Americans love new, shinny shit; they line up outside of stores over night to get the new sneakers first; they bid twice the price of things on eBay to be the first to get them; they camp outside Apple stores for iPads; they buy clothes at full price knowing full-well they’ll be half the price in two months; and they charge it all to credit cards with 14% interest rates. People freezing all their spending over tentative price drops is the last thing I’m concerned with, seriously. It is true that people are lowering their debt burdens right now, but I suspect it’s more of a case of having been over-extended than anything else. As interest rates drop and debt gets repaid, people will begin to lower their monthly debt burdens, which is when the price drops are going to make that extra money itch in the pockets. It’s really only a matter of time before people go back to paying $200 for a 5th pair of sneakers and putting it on their Capital One. Seriously kids, the consumer is going to be alright.

  20. willid3 says:

    well, they have stopped buying new cars almost (going from 16-18 million cars per year to just better than 11.5 million). mostly people are buying used and we can tell this because the market for used cars is really hot. why do people buy i-pods and other gadgets instead of what other do? mainly cause they are cheaper to own that other generations buying habits. in the past people would buy land. try to do that when your incomes have tanked. people would buy houses. even that was driven by the more affluent generations (the younger generation didn’t participate. even with almost free and easy credit couldn’t afford it). most didn’t buy cars, same reason.

    i am wondering if deflation is really driven by incomes collapsing. like here in the US. and that has been happening since about 70s. wonder why that is.
    the only reason the economy from 2001-2007 looked as good as it did, was the easy credit. without which we have what we have now, and easy credit ain’t coming back. this decade. and demand will tank with it. which means jobs go with it

  21. FrancoisT says:

    Unreal! Even on this blog, people STILL conflate government capacity to spend with Aunt Millie home budget!


  22. philipat says:

    Deflation. Coming to a place near you shortly IMHO. Japanese solutions to asset bubbles bursting produce Japanese outcomes, which shouldn’t really come as a surprise to anyone.

  23. gbgasser says:

    A good point was made earlier about our pensioners benefiting from deflation, also many of the New Deal programs have made the spiral less likely or less destructive (depositor insurance for example) but those who talk lightly about the reality of deflation arent thinking about the amount of credit in the private sector. ANY drop in income makes paying off debt harder, causes more contraction, more bank failures ,more credit contraction, more income loss…….. The spiral has some safeguards against it for sure but it should NOT be dismissed as a real threat. Until incomes start to rise, in people other than CEOs and Wall Streeters, we should be on deflation spiral watch.

  24. gbgasser says:

    Yes FrancoisT

    You’d think we were still in a fixed exchange rate gold standard world.

  25. Simply-Put says:

    I knew about a year ago that we were headed for a debt-deflation scenario after reading
    Irving Fisher…. And this is no double-dip just a continuation of a depression…

    In 1933, Irving Fisher, possibly the first celebrity economist, published his paper titled “The Debt-Deflation Theory of Great Depressions,” a thorough reading of which should be required by anyone who wants to talk intelligently about our current crisis. I believe that not only does it address the causes and effects of depressions but also discusses possible solutions.

    As for causes, Fisher believes there are two major factors that lead to a major depression as opposed to a run-of-the-mill slowdown in the business cycle: over-indebtedness and deflation. He believes that other factors can play a role in business cycles but they are basically secondary factors when it comes to real economic upheaval. Over-indebtedness and deflation are the main players in any extended economic downtown. He cites 1837, 1873, and 1929-1933. (I encourage you to read about these periods in history on Wikipedia.) He then lays out the effects, which an astute reader will see are quite applicable to today.

    Fisher provides a partial look at the aftermath of the Great Depression. The question to answer is how did that “over indebtedness” come to be?

    In a New York Times Op-Ed, Robert B. Reich, a secretary of labor in the Clinton administration, and professor of public policy at the University of California.

    American Corporations used low-wage labor abroad or labor-replacing software here at home than to continue paying the typical worker a middle-class wage. Even though the American economy kept growing, hourly wages flattened. The median male worker earns less today, adjusted for inflation, than he did 30 years ago. In addition, they used their homes as a piggy bank to compensate for this lost income. This worked fine as long as the lowering of interest rates moved downwards. But the gig was up when the FED created the largest Asset Bubble in housing of all time to appease Wall Street by lowering rates to zero for to long a period..

    The national economy isn’t escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working: near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package and tax credits for small businesses that hire the long-term unemployed have all failed to do enough.

    That’s because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means haven’t kept up with what the growing economy could and should have been able to provide them.

    America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.
    Abraham Lincoln

    Time and money spent in helping men to do more for themselves is far better than mere giving.
    Henry Ford

    However beautiful the strategy, you should occasionally look at the results.
    Winston Churchill

    And remember this is all due to the Greed of Wall Street….

    We desperately need new leadership in this country….

  26. BillG says:

    Can somebody please explain why foxorrabbit’s idea about the government simply printing more money to solve this deflation issue is wrong because I can’t. I’m not an economist, but it seems like deflation is a pretty easy problem to solve. I mean how hard is it for the government to print more money? Zimbabwe seems to have mastered it. So long as they stop when inflation starts to kick in I don’t see how deflation is anything but a blessing at a time of record deficits. But again, I’m not an economist.

  27. Long term says:

    dead hobo is exactly right when he says this is price normalization. i believe it is also credit normalization. unfortunately, this new reality of less credit is too painful for the hoi polloi to accept as well as too risky for politicians who must “do something” or lose the next election. the best thing to do would be to do less–less bailing out of poorly managed banks and over-priced housing. let the market make up its own mind and don’t try to regulate it into prosperity, which cannot be done. this approach would hurt for 2 or 3 years but would be so much smarter than dragging out the pain out for 10 or 12.

  28. Simply-put,

    The common denominator in all depressions has been paydown of federal debt. See:

    The common denominator in recessions has been reduction in debt growth.

    Why? Because during a recession or a depression, the economy is starved for money. Federal deficit spending creates money. To say the stimulus packages don’t work is like saying that pouring water on a fire doesn’t work, if the fire is not completely out. All that is needed is more water.

  29. bman says:

    “This is why it’s important that banks do not fail,” Sorry Barry my BS Meter just pegged on red there. I think this graphic left a few things out..

  30. Ducky62 says:

    I could use some of that 1% a month deflation return. Aren’t we still running about 2%+ annual inflation?

  31. CTB says:

    Although CPI is a gamed metric, it’s pretty flat but positive.

    @bman — maybe they can’t be allowed to fail, although it’s too bad we left the lunatics in charge afterwards…

  32. subscriptionblocker says:

    Have read all these arguments and many others…..

    Am more convinced than ever that no one really understands the forces now at work in this economy. It’ll be a surprise. Christina Romer is just the beginning.

    Do something/anything constructive and just keep paddling. Try to be pleasant even when frustrated. Best you can do.

  33. Hamilton says:

    FrancoisT Says:
    September 6th, 2010 at 10:00 pm
    Unreal! Even on this blog, people STILL conflate government capacity to spend with Aunt Millie home budget!


    Even more unreal? The people who conflate the govt spending with positive return investments. Poor Aunt Millie has a heck of a bill being run up with her home budget listed as collateral!

  34. ToNYC says:

    Lost me when I’m ready to hear that it is important that Banks anything else that has died. “The dead don’t heal” as Tom Noguchi of L.A. Coroner fame. What we do need is a strong chairperson at FDIC and a Prompt Corrective Action attitude that is actively under review. Doesn’t everyone know by now that the Banks are offloading bad credit every moment they can to the Treasury, and when they’re done they’ll be giving away toasters again in lieu of interest.

  35. bman says:

    “ anything else that has died.” I’m intrigued with this notion in economic circles. The gardener perspective, (the notion of trimming dead branches being a healthy endevour,) works with around 30% of the people. In order to reach the rest of the general populace, the horror/comedy realm of modern experience is how this notion is portrayed… aka Zombies.

    Which do you prefer?

  36. constantnormal says:

    To all those who would embrace a “mild deflation” … there is no such thing, as due to the positive feedback nature of deflation (and inflation), trends increase over time, and it gets harder and harder to exit from (see “liquidity trap”).

    @JT23456 7:42pm in particular — hopefully your big slug of CDs has a maturity farther out than you expect to live … or are you thinking that when it comes time to roll them over, that 1% yields will be sufficient due to the increased purchasing power of your interest checks?

    And just think about what an extended period of uber-low rates is going to do to pensions and insurance companies — places that need a decent rate differential to generate payments to their customers. Sure, the bond prices are rising, but if they have to sell their portfolios to generate day-today cash flow, they are eating their seed corn, and sooner of later we will be seeing either increased premiums or decreased benefits (or both).

    I suspect that even at this point, if we were to embark upon a substantial jobs-oriented stimulus program, it would take many years before deflation was overcome by inflation. And by that time, the hordes of “little people” without much in the way of cash will have become cannibalistic hordes of zombies, lookin’ for “rich folks” to eat. Them rich folks that like deflation are the tastiest, I hear.

    Myself, I favor any kind of income redistribution that would rip back the trillions that the uppermost 1% have stolen from the rest of us over the past 30 years, and sow it among the former middle classes, hoping we could grow a new middle class to replace the one we have destroyed.

    But it really doesn’t matter what anyone here wants, the goobermint is not given to listening to folks that don’t petition with a briefcase full of money — better make that a steamer trunk full of money.

  37. constantnormal says:


    “Aren’t we still running about 2%+ annual inflation?”

    Not according to the metrics used to increase Social Security checks. We are heading into the second year of zero increases — which should by rights be declines, due to a shrinking inflator, but the way the law is written, the CPI adjustment can only go up, payments can never be reduced. So retirees should be VERY happy — expect for our wonderful health care system, with prescription drug costs increasing a lot faster than everything except college tuition.

    So in answer to your question, no.

  38. philipat says:

    America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.
    Abraham Lincoln

    Sorry, can’t agree. America is being destroyed from the Inside.

  39. Yaun says:

    ‘Deflation fear’ is Bernanke’s last joke before ruining the currency.

    According to pre Clinton CPI, inflation has consistently been above 5% for the last 20 years.

  40. IvoZ says:

    I would make several comments about this chart porn:

    1. They focus on supply of credit declining as a cause, but totally omit (as is the case currently) lack of demand for credit due to too high debt/income levels. They also omit credit overexpansion as a primary cause for the bubble.

    2. They omit QE as a tool (not that it has worked miracles).

    3. They think that deflation is bad per se, as it inevitably leads to a deflationary spiral, and it needs to be fought with any measure. But deflation is just the result of the previous excess and it needs to clear malinvestments before it is over, while the monetary and fiscal measures are only kicking down the can down the road, while costly and prolonging the depression.

    4. A major transmission mechanism for economic weakness is described via the job market, but we see that even with the monetary and fiscal measures there was no effect on joblessness, as the measures go to the pockets of crony capitalists or inefficient state / local bureaucrats. Especially their line on not letting banks fail is quite irritating.

  41. IvoZ says:

    @ dead hobo

    BR, thanks for the softball slow pitch. This ‘deflation’ crap is so easy to debunk, there should be a price of admission just to throw feces at it. I really don’t understand why so many otherwise smart people can’t differentiate between price normalization and text book deflation theory. Then, after thinking through the obvious, why don’t they follow the trail back to the source and ask the Fed why it keeps pumping the price of everything as a matter of routine. Then ask why prices that don’t match incomes are a good thing, meaning why don’t they just let prices fall. Then, they can pump again from the bottom if they choose and start another 20+ year bubble cycle.

    Because they do not pump the prices for the common good, but for the good of their owners, which have first access to the pump and can front run the lemmings.

  42. IvoZ says:

    @ MichaelM

    Very well said. So a deflationary price spiral could exist only in big item discretionary items like houses (need to have prices normalized anyway right now), autos and furnishing / household electronics. Price may undershoot a bit, but nobody is concerned if prices overshot before that to begin with. Price deflation is often only a symptom of a depression and not its cause. Pumping up credit in the bubble years leads not only to price increases, but also to artificially high demand levels that also need to normalize. Again, nobody is concerned with the positive spiral of excess during the boom.

    Markets / economy are complex adaptive systems with self-reinforcing feedback loops enhancing trends (both positive and negative), but everybody is only focusing on the feedback loops in the negative trends. This biased meddling has unintended consequences – moral hazard, crony capitalism, uncompetent leaders, weakening of the productive forces within the economy, waste of real savings pools etc.

  43. rvirmani says:

    additional post:

    Please see: – on the root causes of this deflation and what the goals are moving forward.

    My own blog which compares the Japanese experience with the more recent US experience.

  44. Lugnut says:

    Tightening of credit to ‘normal’ standards, especially WRT mortgages should provide housing price levels concurrent with expected levels if you trend forward ‘normal’ inflation and appreciation figures from say, early 1990s leveles. Until pricing falls down to that level, which it needs to do, you can’t really begin to talk about deflation. The bubble is sill bursting and reverting prices to more correct levels.

    I think people want to parrot deflation beause of whats going on with unemployment, and equivicating it with a Depression. Again, chicken and egg scenario. In GD part I, unemployment soared because of the Depression. Here, I think its a leading indicator, not following. Our economy is being ‘exposed’ for what it is(n’t), and thats establishing the trendlines that follow: less employment, less discreationary income, less spending, less profits, tighter credit, lower home sales, decreasing asset prices, etc….

  45. DeDude says:

    It is that simple, and yet we have these GOPsters and their tea-party village idiots calling for the exact kind of action that will throw us into a deflationary spiral. Scary thing is that they are actually going to win enough support to block any federal government action against deflation, and the Fed is out of bullets. That second dip better stay away or we could be in deep trouble.

  46. foxorrabbit says:

    @ BillG:
    No one has taken up the discussion, but the idea isn’t wrong. It would work like a charm. There are some problems/challenges. One problem is that the federal government delegated away its authority to print money (to private banks):
    I’m not sure if the government even has the authority to create money anymore. I think right now only the Federal Reserve and banks have the authority to create money. (Not to be confused with printing the physical representation of that money — “Federal Reserve Notes” — which is still done by the Treasury, for little if any gain.) There are other problems too (especially that it would be nearly impossible to get such a measure passed by Congress) but the idea itself is valid and would work quite well.

  47. DeDude says:


    It is wrong because it does not conform with these peoples ideas of “reality”, the only facts they need are those that will confirm their ideology, any other facts must be wrong or faked. This is why it is so hard to have a debate these days. Most people begin in their ideology and only use (selected) facts as confirmation. Sorting sources and their “facts” for internal and external consistencies (to assign them credibility ratings) is a lot of work – lazy people find it so much easier to begin with an ideology and simply discard anything that does not confirm it.

  48. Marc P says:

    I’ve spent my adult life living with inflation and ever-expanding public and private debt. The perceived health of our economy appears to depend heavily upon this ever-expanding debt. The concept of deflation was nearly completely skipped in the many econ classes I took.

    Someone help me: setting aside the question of whether the U.S. is poised on the edge of deflation or on the edge of price normalization, is there a historical example of a true deflationary spiral out there somewhere in the past 50 years? I say 50 years because modern credit systems are only that old. Previous examples might be inapplicable due to this.

  49. bman says:

    I’m afraid we’re in uncharted territory, but fear not with the internet and so much sortable data
    everything will certainly be sorted out one way or another.

  50. DeDude says:


    I think Japan is the best example to look at although their deflation was the nasty kind with deflation in the things you own (real estate and stocks) and inflation in the things you need. When you average that out the number doesn’t look so bad, but it is actually a lot worse to live with than total inflation or deflation in everything. I think we will go through the exact same thing.