It's sort of simple, inflation is when prices go up and deflation is when prices go down. The key is what price are we looking at and what time period are we measuring over?

We’ve had the highest inflation since the 1970’s. It’s come down some, but what happens next? The conventional wisdom is that inflation is on its way down and that we’ll have a soft landing, the fed will pivot soon and start cutting interest rates, inflation will drop back to 2%, and the economy will rally from here,

Lots of people are speculating whether we’re headed for a recession. John Hussman notes that historically recessions are not officially called until long after they happen. That means we won’t know until way after the fact when or if a recession happens. We could already be in the beginning of a recession, or we might not have one at all, we won’t know for sure until later.

I’ve been thinking a lot about what’s going to happen to the economy so I can prepare for it. The idea that it’s possible to see at least broadly what might happen is alluring. Generally, the economy behaves the way it has in the past, and it’s safe to assume that whatever has worked well in the past will continue to work well. But there are periods of time that are paradigm shifts where all the old rules go out the window, like the oil crisis of the 1970’s and the Great Depression of the 1930’s. It feels like we are now in one of those paradigm shifts.

I have wondered for years what happened during the Great Depression of the 1930s. One day there was plenty of money, everyone was working and spending, and the next day everyone was broke. Where did the money all go? How could all that money evaporate? Did it all go into the pockets of a few rich people? Many many years later I understand it better. Lots of things happened, but one that is important is that credit suddenly disappeared.

My grandmother, Lucile Needham Stevenson, was an amazing woman. I've always admired her so much.  She went to college at a time when few women did. Women didn't even have the vote back then! Then she graduated, married my grandfather, and became a farm wife in Streator Illinois. In 1925 she took the pen name of Hope Needham and started writing a daily newspaper column that was syndicated in four newspapers called the Corn Belt Dailies.