Deflationary Winds Beginning to Gather Strength

I've long argued that the initial phase of the coming unraveling will be accompanied by falling prices for goods of all kind. As economic conditions deteriorate, people (and businesses) will increasingly be looking to sell things to try and raise cash.

That includes items they might still wish to enjoy if they could afford to keep them. It includes accumulated treasures (and junk) that might once have been left gathering dust in basements, garages and attics. Objects that might have been passed down to children and grandchildren will also be seen in a new light -- what they are worth, right now, to somebody else.

An Associated Press report, "Mainers Selling Off Goods as Economy Tightens," suggests the deflationary winds are beginning to gather strength.

Mary Jane Newell and her husband have sold their boat, their lakeside camp and even her Harry Potter book collection. Now up for sell: Newell's offering her Elvis collectibles on craigslist.

What's next? Maybe her Stephen King collection.

"I don't think we've ever had it this tight since we had little kids running around, way back in the '60s," said Newell, of Oxford, who's retired along with her husband, Stanley. She's a former nurse; he's a former Bureau of Motor Vehicles office supervisor.

The Newells expect their heating bill to triple this winter, and they're not alone in unloading items. Rising fuel prices, higher food costs and concerns about the economy are contributing to a sell-off of goods online, in pawn shops, in consignment shops and in yard sales.

In Westbrook, Cathy Haley hoped to pass a diamond engagement ring on to the next generation. She has a secure job as an office manager, but a prolonged child-support dispute and the rising costs of raising her two daughters prompted her to offer the ring on craigslist.

The $1,500 she hopes it will fetch will go toward heating oil.

"I'm keeping my fingers crossed," she said.

The number of customers coming in to sell items at Maine Gold and Silver has been growing since the beginning of the year, said John Colby, vice president and part owner of the South Portland-based business.

People tell Colby they're selling items to pay down debt or to make ends meet.

"We're hearing heating oil, and the heating oil season hasn't even started. The other day, we heard someone say food," Colby said.

Meanwhile, Richard W. Oliver, an appraiser and auctioneer, said he's been receiving more requests for house calls to evaluate antiques and fine art.

Oliver, who works out of Wells, believes attitudes about passing items to future generations are changing. The sellers aren't necessarily facing dire financial circumstances, but may want to maintain a certain style of living, he said.

"Basically, I think they're rethinking things in the economy and saying, 'I could really use the money now. We need the money to take care of ourselves rather than leaving it to the children.' A lot of that has changed," Oliver said.

Comments

[roger]

Deflation=depression and i,m convinced it,s going to be a major one.However for now it's deflation for home owners and big inflation for every day necessities

[Marion.Shaw]

Selling.your.greatgrandmother's.diamond.ring.to.raise
money.to.pay.the.taxes.and.save.your.property.is
one.thing..Selling.off.family.treasures.to.buy
heating.oil.is.another.I.survived.two.New.England
winters.with.five.children.back.in.the.eighties
with.lots.of.sweators,undershirts,and.a.kerosene
stove.They.make.good.ones.now.and.you.keep.one.room
warm.and.sleep.under.wool.blankets.Besides.cold.bed-
rooms.cut.down.on.children's.respiratory.problems.
You.can.survive.a.cold.winter.but.you.never.get.
the.ring.back.and.most.likely.will.regret.the.decision
later...Been.there.and.made.it.

[Tax Lawyer]

No, we will have deflation only for the FIRE economy (financial insurance, and real estate).

Everything else will be going up. I can tell you one thing, the people pawning their gold will seriously regret doing so, when the only inflation proof assets will be precious metals.

[oblomov]

This article reminded me of an old, but good, chestnut. Be sure to click on pages 2 and 3.

http://www.modernhumorist.com/mh/0006/misfortune/index.cfm

[Red Woods]

Triple heating oil ? Come on I buy heating oil myself and it is no where near triple. I added a lot of insulation to my house where ever it could be added. Maybe converting to wood heat and cutting wood like I did for 30 yrs.I'm old but if my heating bill tripled I would be back cutting wood on weekends.

Red