January 8, 2025 • 11 mins
Chris challenges the mainstream narrative on deflation, questioning whether falling prices are truly harmful to the economy. Drawing on recent remarks by Xi Jinping and economic theories, Markowski dissects why deflation might not be the disaster it's often portrayed to be. From groceries to energy and healthcare, lower prices on necessities could benefit the average person, despite economists' warnings about deflationary spirals. www.watchdogonwallstreet.com
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
Is deflation a dirty would? Anyway? I was invited on
a program this morning and they were asking me about
some of the recent comments by Zizien Ping and China,
(00:36):
and how he said, you know, deflation is not so bad.
A lot of economists are talking about the price spiral
in China and how prices are coming down and this
deflation is awful, it's bad for the economy, and Xijien
Ping saying inflate deflation is somehow a bad thing. Again,
(01:01):
he's basically saying, hey, people can afford to their money.
Their dollar goes far, they can buy more with their money. Anyway,
Is he right or wrong? Is deflation a dirty word? Now? Again?
If you think about it, I mean, if you think
about it, it's one of those things it's brought up.
I mean, Ben Bernanke gave a speech years ago. I'll
(01:24):
get into that a little bit, where you know, the
powers that be, the PhD economists, the talking heads on TV.
They will warn you about deflation. It's a dirty word.
Oh my god. We don't want deflation. That's what happened
during the Great Depression. So we're having a great different prices,
(01:44):
we're dropping like crazy. We don't want that to happen. Now,
you and I who live in the real world, Okay,
I question, raise your hand, raise your hand out there.
If you would like your gross three prices to go down. Okay,
keep your hand up. Keep your hand up. If you'd
(02:05):
like to see your restaurant bill prices come down, keep
your hand up. If you'd like to see the cost
of energy come down. Coffee, calm down, gym membership, calm down, education,
higher education, calm down? Shall I go on? Shall I
(02:26):
go on? Anyway, you and I who live in the
real world are saying to us, says, well, how could
deflation be bad? I mean, wouldn't it be great if
my money went further? But no, no, no, lo and
behold we have PhD economists that are telling you if
prices start to drop, that's a bad thing. Bullshit, it's
(02:55):
not a bad thing. I learned to when I was
I remember this again, I again, how my mind works
I'm getting mental pictures. I remember having teachers. This is
when I was in middle school, Farnsworth Middle School, and
we'd be in a class and a teacher would be,
(03:17):
you know, giving some sort of lesson and they would
say something and I'd be like, that doesn't seem right,
that doesn't make any sense. And I know we'd be
in the library for some other class or whatever it
may be, and I would actually research. Yeah, I was
(03:38):
a bit of a dork when I was younger. That's okay,
still a dork now. I would actually look again, I
would prove the teacher wrong. I learned, you know, after
the fact, not to go to the teacher and prove
them wrong. Okay, just keep it to myself, knowing that
they didn't know what they were talking about, or they
(03:59):
were pretending that they knew what they talked about. Anyway,
neither here nor there. You have to do that in
everyday life. Okay. It's because somebody has a PhD at
the end of their name means nothing in many respects.
They've got theories. They've got theories. They've got lots of theories,
(04:19):
and they've got models, and they've got oral sorts of stuff.
And again, I pointed this out last weekend and on
my radio show, I talked about this. Everything everything works
in theory. Everything you could come up with a you know,
in theory, everything works in theory. And I did I
(04:46):
you know, I made I did it on my radio show,
I'll do it I. I kind of was teasing my
brother Michael on the radio show. Let I'll do it again.
When we were younger, my brother Michael uh got this
idea in theory, in theory that he would make cardboard
wings and put them on his arm. And we were kids.
We would swing on the swing as high as we
(05:07):
could and we would jump. And my brother Michael in theory,
thought that if he did that and started flapping his
cardboard wings, he'd be able to fly. Anyway, it didn't
work out in theory. You know, the theory it works,
but in reality it didn't. Anyway. When it comes to deflation, okay,
(05:33):
certain goods, and again we have talked about this for
years here on the program. It's a problem with the
bull excrement government numbers that they provide the various different
inflation numbers. There should be an inflation index that is
totally geared toward things that we need to survive on
(05:58):
things that we needed to survive on now, food, energy,
insurance for your car, for your house, health care, all
of these things, every day items where we would all
be jumping up and down if the prices came down. Now,
(06:21):
what separates these items from other items? Again? Their necessities?
You remember me, This is a couple of years ago
we did a bit on the program where I started
singing the uh from the Jungle Book, the bare necessities.
It's the bare soidies was my bare necessities inflation index.
(06:44):
You tell me that those prices coming down, you wouldn't
be happy. It wouldn't be great for the economy, wouldn't
allow you would allow you to save more money, maybe
go on vacation, maybe maybe to buy some more discretionary items. Now,
the theory out there by the economists is deflationary spiral.
(07:06):
Oh my god, people are going to stop spending. They're
gonna they're you know, they think that prices are gonna drop.
They're not gonna buy stuff, They're not gonna buy things anymore.
And I say, nonsense, nonsense. If you need an item,
(07:29):
and I'm talking about an item that you wouldn't be
buying every single week, every single month, every single year.
And I'll just use a television television for example, I
just bought some new TVs for my house. I am
well aware that the value of the televisions that I
(07:51):
put on my wall. Again, they're they're gonna they're gonna
be worth gonna sell these TVs a year from now
to years from now for a couple hundred bucks. If
that new technology will come out, newer TVs come out,
the value goes. But again, I needed the TV I
bought them. I bought them. Sure, sure, will people wait, okay,
(08:17):
will they wait? Say, oh, I need I and you know,
my lawnmower is old. My lawnmower is old, and I'd
like a new one. Now, if you think prices are
coming down, you go hold off on that item. You
might hold off a little bit, and then you might
wait till it breaks. If you're seeing the prices drop, yeah,
(08:39):
that might affect spending in those areas. But we live
in the present. We live in the present. We're eventually
going to have to buy stuff. Okay, if okay, again,
I like buying things on sale. Let's say I need
a you know, I want to get some suits or
(09:02):
whatever it may be I need them. Okay, I gotta
go on. I gotta do this meeting. I gotta do
this show, whatever it may be. Okay, And something happened
to my existing suits. They got wrecked somehow, I got ruined.
I don't have any suits, but but you know I
need one. Of a certain period of time, I'm gonna
have to buy those suits. Even though I much rather wait,
(09:26):
much rather wait to the friends and family at Sacks
or nord Um or whatever. Maybe I'm I'm gonna have
to go out and get them at that point and time.
These are part of the things that these economists they
don't put into their theory and how it doesn't work.
(09:46):
So no, no prices, prices coming down. Okay, Deflation is
not a dirty word. I gotta you know what, I
gotta look that up. I had that here somewhere before.
Go Hey, I'm going back to good old Ben Bernanke.
Another genius there, genius who didn't see the didn't see
the financial crisis coming, didn't see the financial even though
(10:10):
we did. Yeah, yeah, housing market is solid, Ben BERNANKI.
This was a speech before the National Economists Club. I
want to join that club anyway. Deflation making sure it
doesn't happen here again. This is two thousand and two.
(10:31):
Ben Bernanke laid out measures that the central bank should
employ to combat deflation, such as buying longer maturity treasury
debt and helicopter money. Yeah yeah, no, no, no, no again.
This is part of the problem. All of these theorists
(10:56):
out there don't have a clue. Watchdog on Wall street
dot Com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
Is deflation a dirty would? Anyway? I was invited on
a program this morning and they were asking me about
some of the recent comments by Zizien Ping and China,
(00:36):
and how he said, you know, deflation is not so bad.
A lot of economists are talking about the price spiral
in China and how prices are coming down and this
deflation is awful, it's bad for the economy, and Xijien
Ping saying inflate deflation is somehow a bad thing. Again,
(01:01):
he's basically saying, hey, people can afford to their money.
Their dollar goes far, they can buy more with their money. Anyway,
Is he right or wrong? Is deflation a dirty word? Now? Again?
If you think about it, I mean, if you think
about it, it's one of those things it's brought up.
I mean, Ben Bernanke gave a speech years ago. I'll
(01:24):
get into that a little bit, where you know, the
powers that be, the PhD economists, the talking heads on TV.
They will warn you about deflation. It's a dirty word.
Oh my god. We don't want deflation. That's what happened
during the Great Depression. So we're having a great different prices,
(01:44):
we're dropping like crazy. We don't want that to happen. Now,
you and I who live in the real world, Okay,
I question, raise your hand, raise your hand out there.
If you would like your gross three prices to go down. Okay,
keep your hand up. Keep your hand up. If you'd
(02:05):
like to see your restaurant bill prices come down, keep
your hand up. If you'd like to see the cost
of energy come down. Coffee, calm down, gym membership, calm down, education,
higher education, calm down? Shall I go on? Shall I
(02:26):
go on? Anyway, you and I who live in the
real world are saying to us, says, well, how could
deflation be bad? I mean, wouldn't it be great if
my money went further? But no, no, no, lo and
behold we have PhD economists that are telling you if
prices start to drop, that's a bad thing. Bullshit, it's
(02:55):
not a bad thing. I learned to when I was
I remember this again, I again, how my mind works
I'm getting mental pictures. I remember having teachers. This is
when I was in middle school, Farnsworth Middle School, and
we'd be in a class and a teacher would be,
(03:17):
you know, giving some sort of lesson and they would
say something and I'd be like, that doesn't seem right,
that doesn't make any sense. And I know we'd be
in the library for some other class or whatever it
may be, and I would actually research. Yeah, I was
(03:38):
a bit of a dork when I was younger. That's okay,
still a dork now. I would actually look again, I
would prove the teacher wrong. I learned, you know, after
the fact, not to go to the teacher and prove
them wrong. Okay, just keep it to myself, knowing that
they didn't know what they were talking about, or they
(03:59):
were pretending that they knew what they talked about. Anyway,
neither here nor there. You have to do that in
everyday life. Okay. It's because somebody has a PhD at
the end of their name means nothing in many respects.
They've got theories. They've got theories. They've got lots of theories,
(04:19):
and they've got models, and they've got oral sorts of stuff.
And again, I pointed this out last weekend and on
my radio show, I talked about this. Everything everything works
in theory. Everything you could come up with a you know,
in theory, everything works in theory. And I did I
(04:46):
you know, I made I did it on my radio show,
I'll do it I. I kind of was teasing my
brother Michael on the radio show. Let I'll do it again.
When we were younger, my brother Michael uh got this
idea in theory, in theory that he would make cardboard
wings and put them on his arm. And we were kids.
We would swing on the swing as high as we
(05:07):
could and we would jump. And my brother Michael in theory,
thought that if he did that and started flapping his
cardboard wings, he'd be able to fly. Anyway, it didn't
work out in theory. You know, the theory it works,
but in reality it didn't. Anyway. When it comes to deflation, okay,
(05:33):
certain goods, and again we have talked about this for
years here on the program. It's a problem with the
bull excrement government numbers that they provide the various different
inflation numbers. There should be an inflation index that is
totally geared toward things that we need to survive on
(05:58):
things that we needed to survive on now, food, energy,
insurance for your car, for your house, health care, all
of these things, every day items where we would all
be jumping up and down if the prices came down. Now,
(06:21):
what separates these items from other items? Again? Their necessities?
You remember me, This is a couple of years ago
we did a bit on the program where I started
singing the uh from the Jungle Book, the bare necessities.
It's the bare soidies was my bare necessities inflation index.
(06:44):
You tell me that those prices coming down, you wouldn't
be happy. It wouldn't be great for the economy, wouldn't
allow you would allow you to save more money, maybe
go on vacation, maybe maybe to buy some more discretionary items. Now,
the theory out there by the economists is deflationary spiral.
(07:06):
Oh my god, people are going to stop spending. They're
gonna they're you know, they think that prices are gonna drop.
They're not gonna buy stuff, They're not gonna buy things anymore.
And I say, nonsense, nonsense. If you need an item,
(07:29):
and I'm talking about an item that you wouldn't be
buying every single week, every single month, every single year.
And I'll just use a television television for example, I
just bought some new TVs for my house. I am
well aware that the value of the televisions that I
(07:51):
put on my wall. Again, they're they're gonna they're gonna
be worth gonna sell these TVs a year from now
to years from now for a couple hundred bucks. If
that new technology will come out, newer TVs come out,
the value goes. But again, I needed the TV I
bought them. I bought them. Sure, sure, will people wait, okay,
(08:17):
will they wait? Say, oh, I need I and you know,
my lawnmower is old. My lawnmower is old, and I'd
like a new one. Now, if you think prices are
coming down, you go hold off on that item. You
might hold off a little bit, and then you might
wait till it breaks. If you're seeing the prices drop, yeah,
(08:39):
that might affect spending in those areas. But we live
in the present. We live in the present. We're eventually
going to have to buy stuff. Okay, if okay, again,
I like buying things on sale. Let's say I need
a you know, I want to get some suits or
(09:02):
whatever it may be I need them. Okay, I gotta
go on. I gotta do this meeting. I gotta do
this show, whatever it may be. Okay, And something happened
to my existing suits. They got wrecked somehow, I got ruined.
I don't have any suits, but but you know I
need one. Of a certain period of time, I'm gonna
have to buy those suits. Even though I much rather wait,
(09:26):
much rather wait to the friends and family at Sacks
or nord Um or whatever. Maybe I'm I'm gonna have
to go out and get them at that point and time.
These are part of the things that these economists they
don't put into their theory and how it doesn't work.
(09:46):
So no, no prices, prices coming down. Okay, Deflation is
not a dirty word. I gotta you know what, I
gotta look that up. I had that here somewhere before.
Go Hey, I'm going back to good old Ben Bernanke.
Another genius there, genius who didn't see the didn't see
the financial crisis coming, didn't see the financial even though
(10:10):
we did. Yeah, yeah, housing market is solid, Ben BERNANKI.
This was a speech before the National Economists Club. I
want to join that club anyway. Deflation making sure it
doesn't happen here again. This is two thousand and two.
(10:31):
Ben Bernanke laid out measures that the central bank should
employ to combat deflation, such as buying longer maturity treasury
debt and helicopter money. Yeah yeah, no, no, no, no again.
This is part of the problem. All of these theorists
(10:56):
out there don't have a clue. Watchdog on Wall street
dot Com
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