October 26, 2011

GLOBALIZATION MEANS AMERICAN DEFLATION IS UNAVOIDABLE...:

Nightmare scenario: U.S. deflation risks rising (Jason Lange, Oct 26, 2011, Reuters)

"You run the models and that all points to deflation," said Joshua Dennerlein, an economist at Bank of America Merrill Lynch in New York. "Without some kind of monetary policy help you would definitely get deflation."

Already, many forecasts for price increases are lower than they were a year ago when the Fed announced it would pump $600 billion into the banking system to boost growth and counter fears of deflation, which were growing at the time.


...which is why we've had it for thirty years.  The question is how to prevent it from tipping form the sort of good deflation that comes from efficiencies into the cancerous sort that sses people stuff their money in their mattresses.

Posted by at October 26, 2011 9:09 PM
  

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