Sentences with phrase «fisherian debt deflation»

Just as debt deflation diverts income to pay interest and other financial charges — often at the cost of paying so much corporate cash flow that assets must be sold off to pay creditors — so the phenomenon leads to stripping the natural environment.

In all these cases the effect of debt deflation extracting interest is not only on spending — and hence on current prices — but on the economy's long - term ability to produce, by eating into natural resources and the environment as well as society's manmade capital stock.

Today we discuss in detail the concept of debt deflation; housing, student loan and automobile debt; the oil market; the stock market; negative interest rates; currencies; and the shrinking real economy.

But debt deflation is what happens when people have to spend more and more of their income to carry the debts that they've run up — to pay their mortgage debt, to pay the credit card debt, to pay student loans.

So this is going to aggravate debt deflation and defaults in third world countries.

In addition, nominal GDP targeting has a built - in protection against debt deflation (Koenig 2013, Sheedy 2014).

So in order to save bondholders and banks from losing, the economy would be wrecked by debt deflation.

The kind of deflation that is occurring today is not the traditional phenomenon of falling prices (price deflation) but a bleeding of incomes — debt deflation.

Now that China has built up a prosperous industry and real estate, its main challenge is to avoid the financial dynamics that are subjecting the West to debt deflation and burying Western economies.

So U.S. consumer spending will fall because of (1) no more easy mortgage or credit - card credit, (2) debt deflation as consumers repay past borrowing, «crowding out» other forms of spending, and (3) downsizing and job losses lead to falling wage income.

Introduction Now that the Bubble Economy has given way to debt deflation, the world is discovering the shortcoming of models that fail to explain how...

The problem is that the bankers» solution — the inevitable result of Mr. Greenspan's policy of shifting central planning onto Wall Street — is that it will culminate in the anarchy of debt deflation, deepening unemployment, more real estate foreclosures, and capital flight out of the dollar.

Wage deflation is to go hand in hand with debt deflation and tax increases to shrink the economy.

The hearings enabled them to position themselves for this November's elections when the economy will be tanking even deeper into debt deflation.

All of these economies are shrinking by what's called debt deflation.

This constrains personal and business spending, creating the phenomenon of debt deflation.

The only silver lining I can see is that perception will spread that the financial sector is an intrusive dynamic subjecting the economy to debt deflation.

We begin with an analysis of the continuing bailout of insurance giant AIG and Monday's stock market selloff; price and debt deflation; the two sectors of the economy; two definitions of «free markets»; the classical economists; revolution from the right and the former Soviet states; the threat of war; IMF / World Bank resurgence; the dollar versus the euro; analogies to Rome, neo-feudalism.

This asset - price inflation goes hand in hand with debt deflation of the «real» goods - and - service producing economy.

Unfortunately, Mr. Krugman's failure to see today's economic problem as one of debt deflation reflects his failure (suffered by most economists, to be sure) to recognize the need for debt writedowns, for restructuring the banking and financial system, and for shifting taxes off labor back onto property, economic rent and asset - price («capital») gains.

An alternative definition of a Bubble Economy therefore focuses on asset - price inflation — rising stock market, bond market and real estate prices in the face of an economy - wide debt deflation.

Why then would banks lend more under conditions where a third of U.S. homes already are in negative equity and the economy is shrinking as a result of debt deflation?

The result is a double - crisis: austerity stemming from debt deflation, while public health, communications, information technology, transportation and other basic infrastructure are privatized by corporate monopolies that raise prices charged to labor and industry.

He explains his logic in this interview with the Athens News, on the occasion of publication of his latest book, The Bubble and Beyond: Fictitious Capital, Debt Deflation and Global Crisis, which can be purchased here.

But there also was concern that the Syriza leaders did not begin immediately upon their January election victory to educate voters on what actually is at issue: why remaining subject to the junk - economics dictates by the IMF and ECB will make the economy subject to chronic debt deflation.

They may reject that the eurozone model of austerity and debt deflation.

What this did was it got us to a point where in the late 90's the amount of debt relative to the economy was so massive that if ever there was a serious period of debt deflation, which is basically a time in which debt prices are falling which means they're starting to go insolvent, which means that people are going bankrupt.

And if most governments in the world have been financing their budgets with debt, the minute the debt deflation hit, that's essentially the bond market saying, «hold on now it's going to cost you a lot more if you want to continue financing your budget».

As soon as that started to happen the Federal Reserve would panic and flood the system with liquidity because the dirty secret for central bankers is that the thing they fear most is debt deflation.

Trying to save it by keeping the debts in place — and letting Wall Street banks «work their way out of debt» at the U.S. economy's expense — threatens to lock the economy in a chronic debt deflation and depression.

Asset - price inflation fueled by the Federal Reserve — is giving way to debt deflation.

Industrial capitalism has passed through a series of stages of finance capitalism, from Pension - Fund capitalism via Globalized Dollarization and the Bubble Economy to the Negative Equity stage, foreclosure time, debt deflation, and austerity — and now what looks like debt peonage in Europe, above all for the PIIGS: Portugal, Ireland, Italy, Greece and Spain.

In any event, it already is mathematically impossible to carry today's debt overhead without imposing austerity, debt deflation and depression.

So debts will be kept on the books and the economy will slowly be strangled by debt deflation.

The asset - price inflation that seemed to be making the economy richer has turned into debt deflation, leaving many households strapped to meet their monthly «nut.»

Without clearing our debt, theeconomy will continue to languish in debt deflation and polarization between creditors and debtors.

This is what we now see happening and — despite the 10 % stock market rally today — I am still bracing myself for the inevitable end of the Ponzi game — suddenly or as a long drawn out debt deflation.»

With bank debt at 2 trillion causing debt deflation, a slump in output, supermarkets losing profits because of poverty, a slump in output, a massive trade deficit that requires a massive boost of sovereign currency issue, I would say he is in the neoliberal mold, not the Labour one, and probably not that competent.

Thus on point 1, because the Fed allowed a borrowing bubble to build up twice, in the 20s and today, they ended up poisoning labor employment, because in a period of debt deflation, few companies want to hire on net.

So when you see financial firms pursuing liquidity during a time of debt deflation, don't be a hero — avoid those companies.

Periods of debt deflation are not kind to those taking risks.

With respect to the eras starting in 1929 and 2008, the key concept is debt deflation When there are too many debts, there will be too many bad debts.

Just as the period of debt growth pushed asset prices up, so the period of debt deflation will push asset prices down.

But it's not clear where Smurfit stands in this regard — there are certainly fresh threats to global growth, and debt overhang will restrain the developed markets for years to come — on the other hand, Smurfit's now a dominant player, emerging markets continue to perform well, and Western central banks continue to pump out a tsunami of liquidity to combat debt deflation.

Coming out of a recession, and even more so if it is debt deflation, the key question to ask is whether most of the financing problems are solved.

It could be inflation or more debt deflation.

And, by a full market cycle, I mean a period of time long enough to include a major debt deflation, like the 30s and now.

All three of the legs of the modern retirement tripod (social insurance, savings, and pensions) are under threat as the era of debt deflation progresses.

In the mid-2000s, few thought about the possibility of debt deflation having a serious impact on the US economy.

The money supply might well contract at this point due to the liquidity trap plus debt deflation plus general deflation.