In short, what we and the rest of the world are experiencing is the opposite of deflation whereby paper around the world is being devalued on the way to cautious investment and slow growth.
FORBES: Gary Shilling Is Confused: There's No Global 'Deflation' To Speak Of
We now live in a world where deflation has become public enemy number one.
Many Keynesian economists are aghast, arguing that savage budget cuts will fell a fragile recovery and condemn the rich world to deflation.
But the real threat to us and to the rest of the world is dollar deflation.
Earlier, acting to counter real or feared deflation in much of the developed world, the authorities had kept money loose and official rates low.
Dollar deflation is the last thing the world needs right now.
In the rich world, a period of deflation seems more likely in America than in Europe.
Which is not to say that deflation is about to be unleashed on the world, but that the risks of it are not as small as you might suppose.
Gold has been the investment of choice for investors who see all kinds of economic calamities hitting the world economy, from hyperinflation to hyper deflation, to the collapse of the dollar, and nation states.
The Fed's inadvertent deflation is letting the air out of economies around the world.
This caused a debt-deflation spiral in America that infected the rest of the world.
The rich world does not seem to be on the precipice of deflation.
Some economists now believe deflation is a serious possibility in what is, after all, the world's third-largest economy.
In much of the world outside America, the risk of falling consumer prices (ie, deflation) is at its greatest since the 1930s (see article) .
Substitute deflation for inflation and you'll begin to understand what's hitting us and the world today.
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