Mish Defines Deflation and is Still Bullish on Gold, S & P Predicts 75% Drop in Commodity Prices With China Slowdown, and Greek Protesters "Seize" Finance Ministry

Quick post today, just got to D.C. (technically Arlington, VA), nothing like driving through D.C. and Baltimore rush hour.

Here is another part of Mish's interview with The Daily Ticker where he defines deflation in terms of credit lent out and still makes the call that we will see another dip when the junk bond market goes by the wayside.

Mish makes a good point that the excess reserves come after credit expansion and that hyperinflationists may be wrong.  He seems to contradict himself when he says people are losing faith in the currency and they are buying gold yet still calls inflationists wrong though.  I guess we will see what happens when QE2 ends and the end of the summer if QE3 comes.

So perhaps precious metal prices will be falling soon, see this Bloomberg article:

A “sudden” slowdown in China may lead commodity prices to fall as much as 75 percent from current levels, Standard & Poor’s said.
Unexpected shifts in government policies or problems in the banking sector may trigger such a slowdown, S&P said in a report e-mailed today.

I am unsure if S&P's commodity index has oil in it.

Don't you just love misinformed and confuses protesters?

Protesters belonging to the left-wing The All-Workers Militant Front (PAME) union unfolded a giant banner from the roof of the finance ministry building on the central Syntagma square, calling for a nationwide strike against the new austerity measures that the government agreed to take in return for the new bailout package.

"From dawn today forces of PAME have symbolically occupied the finance ministry, calling on workers to rise, organize their struggle and prevent the government's barbarous and anti-popular measures from passing," the front said, AFP reported.

Angry citizens in the country have now, for a tenth consecutive day, held anti-government demonstrations against the austerity measures.

Don't get me wrong, its great seeing protesters opposed to further bailouts, but I am unsure if they realize that Greece would have to do the right thing and default, which may cause further austerity measures.  Whatever the case, the protesters really shouldn't be looking to the government for help when it clearly made promises to public workers it couldn't fulfill.