Deflation is here and now and everywhere.

If one were to listen to the policy makers and news media, one might think that deflation may still be averted and has not yet arrived. But if one reads the official economic statistics from around the world one will see that deflationary spiral has already arrived and is beginning its whirlwind motions in earnest.

As MISH succintly puts it in his latest post Misguided Worries About Inflation:

The notion of inflation and deflation at the same time is a widely held belief based on brainwashing by the Fed about what inflation is. If everyone realized inflation involved money supply, the Fed and Central Bankers would not be able to lie through their teeth about being “inflation fighters”.

Once you realize that inflation involves money supply, you must come to the realization that the only source of inflation in the world comes from Central Bankers. Unfortunately, the media has bought the Fed’s “inflation fighting” mantra hook line and sinker by talking about inflation as if it was prices.

But even if one were to look at inflation/deflation as CPI one would not fail to notices that prices are falling around the world. Consider these latest statistics from countries in different parts of the world:

US Consumer Prices Down 2.1 Percent Over 2008.
Spain’s inflation at record low in July -1.4%.
Eurozone Consumer Prices Drop More Than Estimated -0.7%.
German Prices Drop First Time in 22 Years -0.5%.
French consumer prices slip again in July -0.8%.
Further deflation in Ireland as prices fall 5.9% in year to July.
Bulgaria Registers 0,6% Deflation in July, Zero 2009 Inflation.
Malaysia June CPI -1.4% in June.

And all this despite trillions of freshly “printed” dollars injected into the financial system by Central Banks.

Welcome deflation!


Post a Comment

%d bloggers like this: