This is «
value deflation,» and it could become a big hurdle for solar as it goes mainstream, potentially limiting its reach.
There's a fourth option, too: utilities can retire older, less - flexible generating units that exacerbate
the value deflation problem.
«Storage and load controls definitely do have potential to mitigate
value deflation, but they're not going to fix the problem entirely,» explains Kann, the senior vice president for research at Greentech Media.
Not exact matches
«Japanese companies have a lot of extra cash at hand because when there's
deflation, the
value of cash won't diminish even if they keep the money and not spend it on capital expenditure,» Iwata told Reuters in an interview in January.
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.
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).
The Pigou effect, as I am using the term, is simply the hypothesis that the real
value of money rises under
deflation, and an increase of real money balances under
deflation — if sufficiently large — could cause higher demand growth.
Prospective TIPS investors should be aware that if
deflation occurs, the
value of the bond will be adjusted downward, and interest payments will be reduced.
Despite their high real yields, the premiums over face
value would erode in the event of
deflation (though the securities do not mature at less than par in any event).
Volcker was determined to pursue a policy of
deflation to break the back of inflation and restore stability to the dollar's
value, and thus deflate the
value of commodities that are denominated in those strengthening dollars.
A trend away from low inflation, whether to high inflation or
deflation, drives the
value of the market lower.
Mr Reitzer said trading conditions in the core grocery business remained challenging as frugal consumers shopped for
value,
deflation persisted in fresh food and the marketing war between Coles and Woolworths forced Metcash to spend more on advertising discounts.
Included in the PowerPoint: Macroeconomic Objectives (AS Level) a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis - the shape and determinants of AD and AS curves; AD = C+I+G + (X-M)- the distinction between a movement along and a shift in AD and AS - the interaction of AD and AS and the determination of the level of output, prices and employment b) Inflation - the definition of inflation; degrees of inflation and the measurement of inflation;
deflation and disinflation - the distinction between money
values and real data - the cause of inflation (cost - push and demand - pull inflation)- the consequences of inflation c) Balance of payments - the components of the balance of payments accounts (using the IMF / OECD definition): current account; capital and financial account; balancing item - meaning of balance of payments equilibrium and disequilibrium - causes of balance of payments disequilibrium in each component of the accounts - consequences of balance of payments disequilibrium on domestic and external economy d) Exchange rates - definitions and measurement of exchange rates - nominal, real, trade - weighted exchange rates - the determination of exchange rates - floating, fixed, managed float - the factors underlying changes in exchange rates - the effects of changing exchange rates on the domestic and external economy using AD, Marshall - Lerner and J curve analysis - depreciation / appreciation - devaluation / revaluation e) The Terms of Trade - the measurement of the terms of trade - causes of the changes in the terms of trade - the impact of changes in the terms of trade f) Principles of Absolute and comparative advantage - the distinction between absolute and comparative advantage - free trade area, customs union, monetary union, full economic union - trade creation and trade diversion - the benefits of free trade, including the trading possibility curve g) Protectionism - the meaning of protectionism in the context of international trade - different methods of protection and their impact, for example, tariffs, import duties and quotas, export subsidies, embargoes, voluntary export restraints (VERs) and excessive administrative burdens («red tape»)- the arguments in favor of protectionism This PowerPoint is best used when using worksheets and activities to help reinforce the ideas talked about.
Assuming a rising CPI, i.e. inflation as opposed to
deflation, historical
values of the index are adjusted upwards.
Growth -
Value switching based on the yield curve works better (i.e., has higher Historical Surviving Withdrawal Rates) when there is inflation than when there is
deflation.
It is considered as a sound inflation hedge since the
value of TIPS can rise and fall according to inflation and
deflation.
The main way to get
deflation is for velocity to plunge as a result of credit defaults and bank runs, driving investors to place a great
value on cold, hard cash.
The cost of computers drops every year, so the present
value is less than the cost of replacing it today, because the bank savings rate is much more than the computer
deflation rate.
The market
value of a portfolio may decline as a result of a number of factors, including interest rate risk, credit risk, inflation /
deflation risk, currency risk, mortgage and asset - backed securities risk, U.S. Government securities risk, foreign investment risk and derivatives risk.
The market
value of the portfolio may decline as a result of a number of other factors, including interest rate risk, credit risk, inflation /
deflation risk, mortgage and asset - backed securities risk, US Government securities risk, foreign investment risk, currency risk, derivatives risk, leverage risk and liquidity risk.
The market
value of the portfolio may decline as a result of a number of factors, including interest rate risk, credit risk, inflation /
deflation risk, mortgage and asset - backed securities risk, U.S. Government securities risk, foreign investment risk, currency risk, derivatives risk, leverage risk and liquidity risk.
Taken as an abstract and stand - alone event, and I know that is hard to imagine, neither
deflation or inflation should have an effect on the real
value or prices of the stock market.
Unlike a conventional bond, whose issuer makes regular fixed interest payments and repays the face
value of the bond at maturity, an inflation - indexed bond provides principal and interest payments that are adjusted over time to reflect a rise (inflation) or a drop (
deflation) in the general price level for goods and services.
Real GDP Growth is a macroeconomic measure of the
value of economic output adjusted for price changes (i.e., inflation or
deflation).
... I would be interested in your thoughts about what kind of stocks listed in the 250 list [in Cabot Benjamin Graham
Value Letter] would prosper in a market declining 30 - 50 % with
deflation.
In the rare event that the CPI - U is negative during a period of
deflation and the decline in the CPI - U is greater than the fixed rate, the redemption
value of your I Bonds will remain the same until the earnings rate becomes greater than zero.»
Gyrating stock
values, slumping oil prices, turmoil in foreign currency markets, predictions of slow growth or even
deflation abroad... Suddenly, the outlook for the global economy and financial markets looks far different — and much dicier — than just a few months ago.
The big question for European
value is how you deal with the reality of
deflation.
Deflation is a clear risk for any
value investor.
The problem with
deflation is it destroys the
value of assets every day.
While gold was washed out during the Great Depression once global economies abandoned the gold standard, today it provides a store of
value against risks of both inflation and
deflation.
But one has to be mindful of the effects that a more severe
deflation causes for
value investors.
Deflation is generally considered to be an environment of slow economic growth and where there is actually a negative inflation rate, with the end result being an actual increase in the real
value of money.
The bond rally and forex drop in
value have been driven by fears of
deflation and speculation that the European Central Bank will need to continue, if not increase, the purchasing of debt to stimulate the region's economy.
In the unlikely event that
deflation were to occur, the
value of the bond would remain at its pre-
deflation level.
In periods of
deflation, an I Bond will not lose
value as the US Treasury has set a floor on the rate at 0 %.
Even in the event of
deflation, I Bonds are guaranteed to not lose
value.
Even in periods of
deflation, I bonds protect your investment by never losing
value.
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