David Rosenberg: 11 Signs That Deflation Is The Primary Trend

Taco Bell Tacos

Photo: Wikimedia

The word of the day is obviously “deflation.”The dollar is rallying, markets are tanking, and crude oil has fallen below $70.

This is obviously great vindication for the likes of Gluskin-Sheff’s David Rosenberg, who has been a deflationista from the beginning.

In today’s note, he offers 11 points of evidence that that deflation is the primary trend.

Credit is contracting

Wage rates are stagnating

Money supply growth is vanishing

The U.S. dollar is strong

Commodities have peaked

U.S. home prices are rolling over … again

Lumber prices tumbling (down nearly 17% from April 2010 highs)

Wal-Mart is cutting prices on 10,000 items

Home Depot just cut prices on flowers, fertilizers, lawn equipment and outdoor furniture

Taco Bell is offering two dollar combo meals

The April U.S. retail sales report hinted at deflation in groceries, electronics, apparel and sporting goods

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