the difference between now and the seventies(smokey)

the difference between now and the seventies is that, then we were still a net exporting country. Our economy had an income.

Increasingly in the past ten years, our income has come from... you guessed it... Debt... and lots of it.

Ourpersonal incomes in this net importing economy now depend on each otherto buy services and imported stuff. Therefore, as unemploymentincreases, the loss of jobs will be exponential.

Eventually the loss of purchasing power will drag down prices as well.

Asfar as monetary inflation is concerned, we may actually have monetarydeflation in the economy now if asset deflation in real estate isconsidered. And the monetary inflation in the financial sector may alsonot be as large as it seems if asset deflation in the creditderivatives is subtracted.

So although we may have stagflationnow if we look at the price inflation of necessities. That priceinflation is actually deflating the rest of the economy. Add indeteriorating credit conditions and 2008 is going to be one hell of ayear.

Literally.