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The topic of deflation is starting to be mentioned on a number of threads. I think the time has come for an SI thread dedicated to the exploration and discussion of the concept and its potential ramifications for investors.


This week's cover story in The Economist makes it more or less official. Deflation, not inflation, is now the greatest concern for the world economy. Over the past year, producer prices have fallen throughout the advanced world; consumer prices have been falling for the last 6 months in France and Germany; in Japan wages have actually fallen 4 percent over the past year. Until the recent crisis prices were falling in Brazil; they continue to fall in China and Hong Kong; they will probably soon be falling in a number of other developing countries.

So far, none of these price declines looks anything like the massive deflation that accompanied the Great Depression. But the appearance of deflation as a widespread problem is disturbing, not only because of its immediate economic implications, but because until recently most economists - myself included - regarded sustained deflation as a fundamentally implausible prospect, something that should not be a concern.

The point is that deflation should - or so we thought - be easy to prevent: just print more money. And printing money is normally a pleasant experience for governments. In fact, the idea that governments have a hard time keeping their hands off the printing press has long been a staple of political economy; dozens of theoretical papers have argued that the temptation to engage in excessive money creation causes an inherent inflationary bias in fiat-money economies. It is largely to combat that presumed bias that most of the world has accepted the notion that monetary policy should be conducted by an independent central bank, insulated from political influence - and has written into the charters of those central banks that they should seek price stability as their main, often only, goal.

Yet here we are, with deflation turning out to be a serious problem after all - and with policymakers finding that it is not as easy either to prevent or to reverse as we all thought.

How can this be happening? What does it imply for policy? The purpose of this note is to argue that more or less conventional economic theory actually does suggest some answers to these questions - but that these answers fly in the face of conventional policy wisdom. And because the answers are so hard to accept, deflation is indeed a real risk..."
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592Fearing Deflation, the Lady is not for Tapering MURRAY GUNN • SEPTEMBER 10, 202Don Green-September 11
591The Great deflation of 2022 It is not very surprising to me that nearly every tDon Green-August 31
590Deflation A Bigger Risk Than Inflation, Fed May Ease Again: Macquarie’S Shvets (Don Green-August 30
589Understanding the Differences Between Inflation, Deflation & Stagflation [gDon Green-August 26
588Household Debt Takes a Big Jump BOB STOKES • AUGUST 9, 2021 Here's an excDon Green-August 10
587Russia registers weekly deflation in week to Aug. 2 MOSCOW, Aug 4 (Reuters) - RDon Green-August 5
586Deflation Hinges on Dollar That Refuses to Die [graphic] My friend Greg HunterDon Green-July 26
585Major Bank Puts the Kibosh on Personal Lines of Credit BOB STOKES • JULY 19, 20Don Green1July 21
584[youtube video] [graphic]Don Green-July 20
583European Central Bank's New Strategy European Central Bank's New StrateDon Green-July 17
582Inflation? Not in Japan. And That Could Hold a Warning for the U.S. -… July 15, Don Green1July 16
581The Critical Risk Of Simultaneous Inflation And Deflation The United States is Don Green-July 11
580Highest Inflation in History Points to 1987 Redux and Asset Deflation Murray GUNDon Green-July 10
579The Case For Deflation Macro Themes Jul 7 With so much focus being placed on tDon Green-July 8
578Forget inflation – deflation could rear its ugly head soon CNBC Deflation is vDon Green-July 8
577The Great Debate: Inflation Versus Deflation Source: Michael Ballanger for StreDon Green-June 30
576 China needs higher inflation BEIJING – Recent price increases in the world’s Don Green-June 27
575Deflation Talk John Mauldin| Thoughts from the Frontline| May 28, 2021 If yoDon Green-June 12
574What is Deflation? What are the Causes and Consequences of Deflation? How Can DeDon Green-June 9
573Inflation might well keep rising in 2021 - but what happens after that? BrigittDon Green-June 5
572Transitory Inflation (and Deflation) The devil of “transitory” might be in the Don Green-June 5
571 Inflation For Now, But Should We Worry About Deflation Later? May 29, 2021 SDon Green-May 29
570Banks Scream for Deflation as they Drown in Liquidity It is a sign that the FedDon Green-May 29
569 What if the Fed Can’t Raise Interest Rates? Why Near-Zero Is the New Normal. Don Green-May 27
568Slowing Bank Credit is a Deflation RiskMURRAY GUNN • MAY 14, 2021 There might bDon Green-May 15
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