OECD sees no danger of deflation in eurozone while deflation is in full swing in the region.

OECD’s official is clearly in denial of deflation. His statement shows that he either does not understand what is taking place in the eurozone economy or he deliberately misrepresents the situation. The evidence of deflation is everywhere in Europe shown by both declining prices indexes and by the actions of both the ECB’s 442 Billion Euroe infusion into the credit markets and the Swiss National Bank’s attempt to prevent deflation by devaluing the Swiss Franc, yet he continues to claim that there is no danger of deflation. Perhaps there is no danger in falling off a cliff … when you already fell.

Consider this news brief from Reuters vi Guardian UK:

OECD sees no danger of deflation in euro zone

Reuters, Wednesday July 1 2009

LJUBLJANA, July 1 (Reuters) – The Organisation for Economic Cooperation and Development (OECD) said on Wednesday it saw no danger of deflation in the euro zone although prices fell into negative territory for the first time in June.
OECD’s Secretary General Angel Gurria told a news conference during his visit to Slovenia he saw no deflation danger in the euro zone but added there is a possibility of a prolong period of negative prices in Japan.
“I don’t see that people should be too worried about inflation I think we should focus on how to get back to growth,” Gurria said.

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