Thoughts from the Frontline

Simple Deflation

By John Mauldin

January 11, 2002

Deflation, Pure and Simple.
Japan’s Currency and Bonds to Collapse?
Et Tu, Switzerland?
Something Vicious This Way Comes
Housing Beginning to Weaken
Come Fly With Me

Last week's 2002 Forecast laid out the clear cut case that deflation would be the dominant economic force in the first part of 2002. I took pains not to use any recent data, trying to make the case on long-term economic patterns. I have always felt it is dangerous to use weekly data to make long-term forecasts.

As the months roll along, we will look at the weekly data that comes out to either confirm my belief or force me to change. Also, we will be looking for signs of returning inflation and a weakening dollar, both of which could have a major impact on the outlook for long term bonds and the stock market.

(First, I will be in Phoenix, New York, Philadelphia, Boca Raton and California in…

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