Inflation or Deflation or Stagflation?

My Summary:
If the economy is based on 70% consumer spending and the bulk of the balance is our national debt - - -

What are the motivating factors for anyone to buy --- ANYTHING?

From Wikipedia, the free encyclopedia
One remedy to a liquidity trap is expanding the money supply via quantitative easing or other techniques in which money is effectively printed to purchase assets, thereby creating inflationary expectations that cause savers to begin spending again. Government stimulus spending and mercantilist policies to stimulate exports and reduce imports are other techniques to stimulate demand

Government is causing inflation to encourage us to spend money?

Without a question, as prices rise and interest rates trend up, people that HAVE TO BUY will purchase. For housing, many will stay where they are due to job insecurity and the lack of confidence in the economy.

Interest rates have never been so low and this has NOT jump started the economy and housing continues to slump.

In the Jimmy Carter days of stagflation, we purchased a home with an 18% interest rate. I was working for a large regional builder/developer and in charge of our housing product design and projects.

We used the phrase “nice but not necessary” in selecting products and features.

Every element of the house was questioned as we achieved a price point that generated sales. Of course the housing market today is much different with foreclosures and short sales. The company survived to build another day because government changed under the leadership of Ronald Reagan.

I really thought the housing market would turn around in late 2011. I am not sure this will happen. By definition the recession ended in 2009. In reality, we are in an inflationary, deflationary and stagflationary period of time. This is an unparalleled circumstance in our history.

I have to reach back to my previous recession days to regenerate solutions that carried the day. As an example:

1. Instead of a compelling price ---- start using the phrase “over whelming” price to generate a sale. Watch what the retailers do this holiday season.

More to come in future posts…….