From Mish: Social Mood Will Define The Future

Boomers have known only inflationary or reflationary conditions for most, if not all of their conscious lives. Here is the pattern: Want, work, borrow, spend, enjoy, and worry about the bills tomorrow, as if tomorrow would never come.

Now tomorrow is dawning, the bills are due, and boomers are now entering end of life with a need to consume what they perceived would be a treasure chest of accumulated wealth that would allow them to sustain their inflationary lifestyles to life's end.

However, that wealth has now vanished in a giant deflationary two-step of collapsing home prices and a collapsing stock market. Note that those are symptoms of deflation not proof of it.

However, 15 out of 15 things one might expect to see happen during deflation are happening now, as detailed in Humpty Dumpty on Inflation.

Material living standards and associated expectations among even the lower working class and poor in the western nations have been raised to levels that will not likely be maintained during a secular deflationary crisis, let alone permit the lifestyles of the upper working class, professional middle class, and wealthy to remain intact.

A good post from Mish and a must read for those of us running a business. Check it out.