'It's a collapse in asset prices (not consumer prices) that will restrict bank lending and cause consumers to hold off on consumer purchases.'

<blockquote>'The Fed is fighting the wrong battle. It's a collapse in asset prices (not consumer prices) that will restrict bank lending and cause consumers to hold off on consumer purchases.

The only correct approach is to not spawn bubbles in the first place. (Please see Bubblicious Questions: What Causes Economic Bubbles? When Do Bubbles Burst? Can the Fed Prevent Bubbles?)

Return of Deflation

The current "feel-good" effect will not last forever, look out below when it wears off. Deflation, in terms of consumer prices, asset prices, and credit will return.

Misguided Fed policy ensures that outcome.

- Mish, Deflation Theory Reality Check: Why Inflation is Severely Understated; Feel Good Effect, February 12, 2014</blockquote>


Context

<blockquote>'..an effort to expand your study of the Austrian theory..'

'..Austrian theory is absolutely essential to successfully navigate the treacherous macro investment landscape..'

‘Few understand the deflationary impacts .. or the stress..’ - Mish (Context)</blockquote>