Sentences with phrase «of debt deflation»

As such, we build up productive capacity using debt, assuming that high compound growth will make it work, and fall into another bout of debt deflation.

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

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.

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

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

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

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.

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.

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?

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.

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

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.

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.

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.

Not exact matches

In 2010, Shilling penned The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation, in which he predicted savings levels would increase and debt levels would fall in the lead - up to 2020.

The first priority is to keep a downward debt - deflation spiral from taking hold; once that scenario is less of a risk, reining in government finances can be considered.

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.

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.

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.

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.

Risks associated with the Consumer Discretionary sector include, among others, apparel price deflation due to low - cost entries, high inventory levels and pressure from e-commerce players; reduction in traditional advertising dollars; increasing household debt levels that could limit consumer appetite for discretionary purchases; declining consumer acceptance of new product introductions; and geopolitical uncertainty that could impact consumer sentiment.

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.

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...

There is a natural tendency for asset values to decline in line with deflation, whereas the nominal value of debt is constant (and, when interest costs are added, the nominal value of monetary obligations actually increases).

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

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.

Since 2001 the silver and gold markets have gone up substantially as a reaction to the 20 year precious metals bear market from 1980 — 2000, massive increases in military spending, weakening global economies that REQUIRE Quantitative Easing to avoid deflation, the rise of competing currencies that weaken the dollar's trading status, excessive debts in Europe, Japan, the United Kingdom, and the United States, and so much more.

Plus, they've had years of this awful deflation, where it gets harder and harder to meet fixed debt service payments.

Remember what Irving Fisher told us in The Debt - Deflation Theory of Great Depressions: The public psychology of going into debt for gain passes through several more or less distinct phases: (a) the lure of big prospective dividends or gains in income in the remote future; (b) the hope of selling at a profit, and realizing a capital gain in the immediate future; (c) the vogue of reckless promotions, taking advantage of the habituation of the public to great expectations; (d) the development of downright fraud, imposing on a public which had grown credulous and gulliDebt - Deflation Theory of Great Depressions: The public psychology of going into debt for gain passes through several more or less distinct phases: (a) the lure of big prospective dividends or gains in income in the remote future; (b) the hope of selling at a profit, and realizing a capital gain in the immediate future; (c) the vogue of reckless promotions, taking advantage of the habituation of the public to great expectations; (d) the development of downright fraud, imposing on a public which had grown credulous and gullidebt for gain passes through several more or less distinct phases: (a) the lure of big prospective dividends or gains in income in the remote future; (b) the hope of selling at a profit, and realizing a capital gain in the immediate future; (c) the vogue of reckless promotions, taking advantage of the habituation of the public to great expectations; (d) the development of downright fraud, imposing on a public which had grown credulous and gullible.

As with the Bear Stearns hedge funds, the Greek episode may well foreshadow a deflation of the bubble in sovereign debt.

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.

The drivers of this low growth environment stem from four secular headwinds — aging demographics, depressed productivity, high global debt levels and incessant deflation deriving from globalization.

His ground breaking research on complex systems modelling of debt - deflation was awarded the eminent Revere Award from the Real World Economics Review, describing Keen as the economist «who first and most clearly anticipated and gave public warning of the Global Financial Collapse and whose work is most likely to prevent another GFC in the future».

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

Option (e) remains extremely risky given the massive levels of outstanding government debt (and potential for fiscal crisis) and therefore low in probability in our view, but the idea came to the fore in investor consciousness after the BOJ held meetings with former FOMC Chairman Bernanke, credited for applying the idea of «helicopter money» to deflation - fighting in central bank policy.

'' — Phase 4: Instability after 1929 caused by deflation of assets from overpriced levels and exacerbated by excessive debt levels, leading to depression of economic activity.

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.

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.

From an investor's point of view, companies that accumulate large cash reserves or that have relatively little debt are more attractive under deflation.

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.

The question that I have at this point in the cycle is how low the Fed will get before they get scared about inflation, and flatten out policy to see which effect is larger — deflation from overvalued housing assets purchased with debt, or inflation of goods and services prices.

Companies with lots of cash and relatively little debt are likely to perform better (not necessarily well — just better) during deflation than cash - poor, highly leveraged companies.

Both articles mention that bonds are a good idea under deflation and both mention that the stock of companies with little debt should be preferred.

The bonds have greater safety and appreciation in the asset class, which has proven to do well during times of deflation and debt leveraging.

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.