Wednesday, Jun 18, 2008
Deflation
Telegraph: Deflation rather than inflation could soon be our big worry
Imagine my pleasant surprise when I typed in 'UK deflation' to google and instead of the same old old articles that always come up, this little gem appeared. The mixed comments at the bottom are good. Makes the point that current inflation is the final inflationary flare off before deflation. Actually it doesn't state this exactly but suggests a strong possibility.
I have a new respect for Roger Bootle.
Posted by stillthinking @ 12:18 AM (549 views) Add Comment
2 Comments
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1. landofconfusion said...
Biflation:
http://en.wikipedia.org/wiki/Biflation
Basically as essentials like food & fuel get more expensive, luxury items such as MP3 players, fridges, houses etc become cheaper as there are less people able to afford them (or pay the asking price).
This should also mean that Liebours' CPI measure of inflation gets more out of sync with reality as it ignores 'volatile' things such as food and fuel but includes MP3 players.
2. last_days_of_disco said...
Haha, this is what I have been saying all along. Inflation hump before the deflationary reality kicks in.
Banks are writing down debt. In fact many have already. Its just going to be more and more painfully obvious as the housing market collapses. This is just too big a stuff up for the system to continue and for governments to get everyone to put up with stagflation.
Reality is beginning to bite. George Soros is right, its a Greek tragedy we know whats going to happen and there is nothing we can do about it.
Yeehah, fasten your seat-belts ladies and gentlemen as public opinion starts to gain momentum.