«It's a good bet that by some measures we'll be seeing
deflation by some time next year,» Paul Krugman, the Nobel laureate economics professor, said this month in his New York Times column.
Abe's mandate is very clear: He needs to end
deflation by reflating the Japanese economy.
In addition, the oil operators have benefited from a long period of
deflation by the oil service providers — overcapacity in the oil service companies led to falling prices and margins for these companies.
At the Centre for Policy Studies, Keith Joseph stressed in a 1976 pamphlet, Monetarism is not Enough, that monetary
deflation by itself could not solve Britain's problems.
It could actually create
deflation by creating rising USD (so lower input costs), rising American output / growth, and rising productivity, which'd all place downward pressure on inflation.
Meanwhile, the U.S. Federal Reserve is still trying to ward off
deflation by stimulating the economy.
Not exact matches
The key message conveyed
by these numbers is this: Japan's loose monetary policies of the last 15 years could not produce a growth rate strong enough to lift the economy out of
deflation.
Since November, just before elections in December that bought the ruling Liberal Democratic Party (LDP) to power, Abe has pushed for bold measures and an aggressive monetary policy to revive the Japanese economy, which is in recession and plagued
by years of
deflation.
«Japan has repeatedly tried to explain that Japanese policies are taken to overcome
deflation and,
by all means, these are measures to overcome
deflation as well as recession.
Back home, the authors expect crushing
deflation due to deleveraging, followed
by devaluation and inflation.
China «s consumer price inflation slowed to its weakest pace in almost a year in August, pulled down
by abating food costs, although an encouraging moderation in producer price
deflation added to growing evidence of a steadying economy.
The sharp jump in debt yields in tandem was mirrored
by a rally in commodity prices, which suggests that investors are becoming less worried about the risks of
deflation.
«Hence, the fear of
deflation driven
by an acute oil price collapse receded, allowing bond yields to move higher,» he added.
«As growth slows and risk of
deflation heightens, we reiterate that China needs to cut reserve requirement ratio (RRR)
by another 50bps in Q4,» ANZ economists Li - gang Liu and Louis Lam, said in a note.
He pointed to Bitcoin holders» tendency to hoard the coins, and predicted that the Bitcoin economy would be plagued
by massive
deflation.
A softer yen has been encouraged
by Japan's new government, led
by Prime Minister Shinzo Abe, who has pledged to end an era of
deflation and revive the economy.
It has also helped draw out one of the longest stretches of food - price
deflation in history, as Walmart's rivals respond
by also slashing prices.
September 2003 (188 kb PDF file): Research summaries on sovereign bonds and public debt management and on international trade; country study: Sweden; summaries of new study on
deflation and recent book: Sweden's Welfare State; contents of latest issue of IMF Staff Papers; visiting scholars at the IMF; titles of recent IMF working papers; list of external publications
by IMF staff.
According to new research on the role of the U.S. dollar from Harvard, cited
by Fed Vice Chairman Stanley Fischer, the U.S. economy is fairly insulated from foreign inflation /
deflation pressures via exchange rates, implying that policymakers should be less worried about global
deflation pressures.
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.
«Simplification, standardization and
deflation are repositioning the oil industry for better profitability and cash generation in the current environment than in 2013 - 14 when the oil price was above $ 100 a barrel,» Goldman Sachs analysts said in a research note on Wednesday, as quoted
by Bloomberg.
So in order to save bondholders and banks from losing, the economy would be wrecked
by debt
deflation.
At present I would suggest that there is large scale
deflation at present as property values unwind worldwide, this will be followed
by falling stock values as investors realize that large sectors of investment returns are also headed for long term decline.
Correcting for the depression's
deflation, that price fall ended
by 1932 and was only 13 percent.
Posted
by Nick Falvo under banks, budgets, capitalism, debt, deficits,
deflation, democracy, economic crisis, economic history, Europe, exchange rates, financial crisis, Greece, IMF, inflation, monetary policy, recession, taxation, unemployment, wages.
All of these economies are shrinking
by what's called debt
deflation.
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.
International investments, particularly investments in emerging markets, may carry risks associated with potentially less stable economies or governments (such as the risk of seizure
by a foreign government, the imposition of currency or other restrictions, or high levels of inflation or
deflation), and may be or become illiquid.
Vanquished
by the bull: Eurozone crisis,
deflation, China bubbles, taper tantrums, BREXIT, and now Trump.
Posted
by Arun DuBois under banks, budgets,
deflation, economic crisis, economic growth, economic literacy, federal budget, fiscal policy, global crisis, monetary policy, recession, Role of government.
But that could be counteracted in the near term
by deflation resulting from another recession.
Thank God someone in the US government understands that Japan is being hurt
by falling NGDP, and that the easier money required to end the
deflation will likely lead to a lower nominal exchange rate.
Spain's household savings rate fell to its lowest level on record in the third quarter of last year as high unemployment and wage
deflation in the latest recession obliged them to devote more of their disposable income to consumption, according to figures released Wednesday
by the National Statistics Institute (INE).
What's more, the reason the Chinese government shouldered more liabilities is that it can partially prevent
deflation caused
by capital flight.
In addition to near zero interest rates, central banks created excessive amounts of money
by issuing trillions of dollars of bonds, e.g. QE1, QE2, QE3, QE4, etc. pushing unprecedented amounts of newly created money into global markets to contain the growing deflationary threat; and, while it failed to contain
deflation, the excessive liquidity is now circulating in markets with no place to go, akin to moribund monetary edema.
«If the American people ever allow private banks to control the issue of their currency, first
by inflation, then
by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.
Grocers have been plagued
by food price
deflation these days, with all and sundry in the industry warning of hits to their top lines.
The Melbourne Institute monthly inflation gauge on Monday showed prices falling
by 0.2 per cent in May, the second inflation measure to register
deflation.
Then though, energy costs were squashed
by «importing
deflation» from low - priced overseas goods.
The Conditions at Sea: Worldwide Circumstances Distracting Investors Since the financial crisis of 2008 - 2009, investors have been obsessed with macroeconomic themes and distracted
by various worldwide circumstances, including
deflation in Japan; the state of global banks; financial instability in Greece, Cyprus and the European Union; and the challenges facing the BRIC economies (Brazil, Russia, India and China).
The effects have been displaced onto public debt, made worse
by near
deflation across the South.
Japan has suffered with
deflation for more than twenty years, something which the Bank of Japan plans to combat
by potentially doubling the amount of yen in circulation.
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.
What happened, in 2008 and what are the consequences, realized and yet to be discovered, of those very extraordinary and unprecedented actions taken
by governments around the world to douse the flames of
deflation?
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.
Lower oil prices are also driving cost
deflation across the broader commodity complex,» Goldman strategists led
by Christian Mueller - Glissmann said in a research note.
You shouldn't be surprised to learn that periods of
deflation are often accompanied
by recessions and depressions like the Great Depression of the 1930s.
Japanese prime minister Shinzo Abe noted that Japan is abiding
by the G20 agreement not to employ competitive devaluation, noting super-loose Bank of Japan monetary policy is meant to stave off
deflation.
This «fear of
deflation» is just a ruse
by central banks to keep inflating the money supply.
Nevertheless, FED officials generally would need additional data points to conclude the formation of a new trend (the famous saying of «3 data points form a trend»), but even slightly stronger optimism over inflation would already serve as a stark contrast vs. market speculation of outright
deflation followed
by Federal Reserve implementing negative rates, or completely ruling out rate hike for the next 10 months.