Tag Archives: stimulus

Japan’s consumer prices fall again in January. Deflation now -1.3% compared to January 2009.


Japan, after two decades of fighting against deflation and racking up 240% of GDP public debt has literally nothing to show for. The deflation is firmly entrenched in the Japanese economy, which is a very good thing for consumers, not speculators.

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Deflation is firmly taking root in USA. FED is still in denial.


Even though the signs of deflation are everywhere as expressed in contracting credit, money supply, and prices, the privately owned Federal Reserve’s executives continue to beat about the deflationary bush by referring to it as “disinflation” and talking about it in future tense. It has been happenning already for the past year and a half and it will continue as evidenced by record low long term Treasury yields this week. The below article provides a detailed discussion and solid evidence of deflation and how it works.

How did the US economy get itself into deflation and why we are going through a deflationary crash.


One important aspect of this mechanism that is seldom mentioned is that the modern debt inflation implies that debt is never payed back and that every year it increases by at least the amount of interest. That means that millions of borrowers simply borrow more to pay off previous principal + interest as dutiful debt slaves they are. That is why debt levels are roughly doubling every decade or so. But what happens when debt growth stops? It is not just that nobody is taking on more debt, the actual principal is being destroyed either via defaults or pay downs. That is, if level of debt is staying constant that means that the principal is actually shrinking by the rate of interest, roughly speaking. This is very deflationary in and of itself. And this is what the privately owned Federal Reserve statistics are showing with regards to most privately held debt in USA. More precisely the consumer and other private debt outstanding is actually shrinking since the beginning of 2009 according the reports that are regularly published by this privately owned Federal Reserve and can be verified on its own website.

The Power Of The FED And Deflation.


This article from GoldSeek makes good points and explains quite clearly why US is going to stay in deflation much longer than most people and so called “economists” think, and why the privately owned FED is unable to reinflate the debt bubble.

Goldman Sachs: Morgan Stanley’s inflation report is greatly exaggerated.


Goldman Sachs is in the deflation camp after all, while Morgan Stanley is worried about inflation.

China on track to deflationary bust as reports show that China’s loan spree goes to stocks, property.


About 20 percent of bank lending is going into stock speculation, and another 30 percent or so is going into the property market, state-run newspapers cited Wei Jianing, an economist with a Cabinet-level think tank, as saying.