Monthly Archives: July 2009

In a snub to ECB’s denial of deflation European Prices Fall 0.6%.

The question is now when will the European Central Bank finally admit that there is deflation in Eurozone?

Deflation arrives to United Arab Emirates. First time since 1990.

Deflationary pressures are being felt throughout the world from Japan to USA to Europe and to the Middle East. No one is going to escape the disciplining force of deflation.

German Consumer Prices Post First Annual Decline in 22 Years.

Just a month ago the ECB officials were confidently BSing everyone that there was not threat of deflation in Eurozone while the credit was collapsing all around them and the CPI was edging lower. Here we are in July and CPI is now drops at fastest pace in Germany, the biggest Eurozone economy. When will ECB admit the truth?

Loans Shrink as Fear Lingers.

The banks are reluctant to lend and consumers, the creditworthy ones, are reluctant to borrow in this depressed and worsening economic environment. And finally, after years of credit frenzy, both banks and consumers are acting responsibly. The deflation has a strong disciplining effect on economic agents and that is what is needed to restore the bubble devastated global economy.

Global deflation pandemic begins to brew.

Behind a global deflation virus is a collapse of demand in the U.S. Unless the economic engine in the U.S. can get cranking again, deflation could keep spreading.

Deflation in the commercial paper market.

Corporate borrowing costs continue to climb along with the steep plunge in commercial paper. Please consider Commercial Paper Falls Most Ever.

The U.S. commercial paper market, the cheapest source of corporate cash, is shrinking at a record pace, raising the cost of capital for borrowers

World Bank Sees Deflation Risk From Excess Capacity.

A failure to address excess capacity in the global economy may cause a “deflationary spiral” that would prolong the financial crisis and result in more company bailouts.

Britain is now deeply in deflationary territory.

Britain is now deeply in deflationary territory. Inflation has registered its steepest decline since statisticians began compiling the figures in 1948. The broad measure of inflation, known as RPI, slumped by 1.6pc on an annual basis.

EU Finances Are Looking Grim. Deflation will not be denied.

As the clowns in European fiancial elite circles are still trying to figure out whether or not they are in deflation, the big D is now solidly in charge of the region. As private credit is collapsing the Euro-zone governments and Central Banks are desperately trying to reinflate by pumping up the public debt and using the proceeds for spending. Yet the reflation is finding itself oddly overpowered by the deflationary wind blowing against it. Sooner or later this public debt bubble, and a huge one, will reach its maximum size and start letting the hot air out. When that happens, there will be nobody to guarantee the sovereign debts. The longer the deflation is delayed, the stronger it will be.

Swiss supply prices drop highlights deflation risk.

Swiss supply prices posted their steepest decline in 23 years in June, highlighting once again the risk of a deflationary spiral of falling prices and declining demand in the Alpine economy.
The steep price drop will also keep the Swiss National Bank on its toes in its fight against deflation, which include interventions to stem a rise in the Swiss franc, economists said.