Deflation coming soon?

**On Thursday,
Walmart CEO Doug McMillon said deflation could be coming as general merchandise and key grocery items, such as eggs, chicken and seafood get cheaper.

He said the retailer expects some of the stickier higher prices, such as the ones for pantry staples, to “start to deflate in the coming weeks and months,” too.**

So in his conference call he is calling out for deflation in staples. If this is true it could be fuel for the economy and hence the stock market.



It’s “right pricing” not deflation. He’s an idiot. Prices go up and down all the time. They just went up (fairly) significantly the past 3 years. No reason for them to stay there. Reaching a more appropriate market price is not “DEEEE-flation” any more than 50% off on bananas at the supermarket today is DE-flation.

DE-flation in ordinary items like he’s talking about would require:

Massive contraction in the money supply (ACTUAL deflation.)
Massive, sudden increase in the supply of ordinary stuff and the farmers et al won’t allow that
Massive collapse of demand by customers. And why would customers stop buying ordinary items?

He’s an idiot. Or just has poor language skills like most people. Or there’s an ulterior motive in his choice of words


Check, that has been happening for 6 months.

Not sure if they will or won’t but I see oil going down so that is a good thing right.

Do they have to stop buying ordinary items or just go to cheaper ordinary items? Start buying store brands and skip the name brands?


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I’m talking deflation of the type implied of by Mr Walmart in the article. The money supply itself is always sort of up and downy. That’s why we canned the gold standard. So we could diddle and dither with it. So, while they might be trying to clean up the past several years of the great money dump, I would not consider that deflation. (not that I’m against it) Besides, I said “massive.” If it were massive we’d know it and it wouldn’t be considered a good thing.

No, consumers shifting from Bumble Bee tuna to store brand tuna or Cheerios to Bag of O’s, is not deflation. In fact those sorts of adjustments are part and parcel of a healthily functioning market place and go on all the time but nobody talks about it. It does not represent a systemic contraction of the economy a la “DEEEE-flation.”

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I posted about the CEO’s comments last night, and wondered, is it the real deal, or is the CEO saying “shop at Walmart, because we are rolling back prices”, that is, advertising, dressed up as “news”.



Ding! Ding! Probably it. Blame the government for evil inflation but take credit for lowering those prices back to where they should be! But if we had actual DEEE-flation, he’d be blaming that on the government.


M2 money supply is currently $20.7 trillion. Six months ago it was $20.9 trillion. Is a 1% change a “massive contraction”?



No. It it were we would have serious economic problems. And please refrain from giving and example of something mundane and not serious and calling it or implying that it’s “Serious.”

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No but it is down 3.5 percent from a year ago so it is showing that it is trending down. Vehicle prices, used and new are trending down. All good signs.