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Weak Consumer Spending Will Last for Years

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"[T]he problem is a lack of demand for loans not a lack of supply. The Federal Reserve can print all the money it wants. But, if there is little demand for more indebtedness, it is not going to have the desired effect of permanently reflating the economy – although it can create bubbles," Ed Harrison writes on the blog, Credit Writedowns.

Harrison goes on to make a crucial point in understanding how this secular deflation will unfold; "Just as we could be entering a cyclical recovery in the middle of a depression, it is altogether possible that the Federal Reserve can produce high cyclical levels of inflation despite the secular trend toward disinflation."