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Massive Deflation Strikes At The Heart Of Germany's Economy

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http://uk.biz.yahoo.com/20072009/323/germa...statistics.html

Monday July 20, 07:49 AM

German producer prices plunge in June: statistics

FRANKFURT (AFP) - German producer prices, the cost of goods at the factory gate, plunged by 4.6 percent in June from the same month a year earlier, the sharpest decline since December 1968, the national statistics office said on Monday.

In May, producer prices in the biggest European economy had fallen by 3.6 percent, the Destatis office said.

The housing bubble black hole is measured in tens of trillions of dollars. The forces of financial gravity will continue to deflate assett prices in line with the new reality for a generation or more a la Japan.

"...the probability of worldwide deflation following the bursting of the biggest financial bubble in world history could easily be put at 100%."

Agree.

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http://uk.biz.yahoo.com/20072009/323/germa...statistics.html

Monday July 20, 07:49 AM

German producer prices plunge in June: statistics

FRANKFURT (AFP) - German producer prices, the cost of goods at the factory gate, plunged by 4.6 percent in June from the same month a year earlier, the sharpest decline since December 1968, the national statistics office said on Monday.

In May, producer prices in the biggest European economy had fallen by 3.6 percent, the Destatis office said.

The housing bubble black hole is measured in tens of trillions of dollars. The forces of financial gravity will continue to deflate assett prices in line with the new reality for a generation or more a la Japan.

"...the probability of worldwide deflation following the bursting of the biggest financial bubble in world history could easily be put at 100%."

Agree.

the probability of governments around the world to continue to pursue the mad policies of printing money is 100%

deflation in terms of gold and silver though 100%

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The housing bubble black hole is measured in tens of trillions of dollars. The forces of financial gravity will continue to deflate assett prices in line with the new reality for a generation or more a la Japan.

Some people still won't get it until it lands on their head, a la Newton.

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+1 Always said deflation. Inflation a secret bull tactic - "Your savings will disappear!" Rubbish

+1

im still as much in the deflation camp as i have been since the start of 08. longer term cash could be a problem if the debt becomes so big and the countries GDP drop to a level where the debt cant be repaid but that for me is a long way off and my cash will have been transfered for a house with land long before that.

Edited by getdoon_weebobby

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inflate prices through devaluation

:blink: what do you mean by that HAM ?

Edited by VoteWithYourFeet

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+1

im still as much in the deflation camp as i have been since the start of 08. longer term cash could be a problem if the debt becomes so big and the countries GDP drop to a level where the debt cant be repaid but that for me is a long way off and my cash will have been transfered for a house with land long before that.

"The deleveraging will not be denied" - source : unnamed banker.

Although PPI doesn't always feed exactly by the same proportion into CPI, it is certainly not a good sign going forward for Europe's largest economy. I still don't understand the inflationists, or maybe they don't just understand the degree and amount of leverage that was built up over the last 30 years in the system especially with the use of off balance sheet items i.e OTC derivatives.

Putting aside the arguments over what is money, cash is certainly king for the foreseeable future. I've seen nothing yet in either the yield curve or the behaviour of gold to suggest inflation is on the horizon.

Edited by moneyscam

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The only reason we are standing alone against falling prices is because of the catastrophic collapse in the currency (that hardly made the mainstream press) we had in the last year.

Yes rpi has gone south because of one off factors such as the rise and subsequent fall in commodities and the reduction in bank rate, but cpi has remained positive because of imported goods costing more in Sterling terms. This is likely to change as the devaluation falls out of the figures and the confusion over inflation and deflation may be in sharp relief.

Sorry, but I don't follow your logic there.

The devaluation will not "fall out of the figures", why should it? and how?

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Sorry, but I don't follow your logic there.

The devaluation will not "fall out of the figures", why should it? and how?

Because the figures everyone uses are YoY?

(If people looked at the index itself, you would be right).

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+1

im still as much in the deflation camp as i have been since the start of 08. longer term cash could be a problem if the debt becomes so big and the countries GDP drop to a level where the debt cant be repaid but that for me is a long way off and my cash will have been transfered for a house with land long before that.

Yep, good point... cash should do well and remain valuable in a deflation when it becomes scarce. The problem is this same cash is also a currency which is traded as a commodity on the fx market. In relative terms it could remain valuable to the mass of consumers and even do well against depreciating domestic assets while at the same time depreciating against stronger currencies in the fx market.

Conceivably, cash could do well by a factor of 2 against assets whilst a stronger currency could do even better by a factor of 4. With this in mind, why is cash and gold pitted against each-other by near all parties?

Edited by roman holiday

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"...the probability of worldwide deflation following the bursting of the biggest financial bubble in world history could easily be put at 100%."

Agree.

Agreed.

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Sorry, but I don't follow your logic there.

The devaluation will not "fall out of the figures", why should it? and how?

I interpret this as being that countries like Germany (and Japan, China etc.) will effectively be exporting their deflation to us in terms of reduced product prices, so that any previous inflationary effect on imports caused by the earlier devaluation of sterling will be nullified or reversed.

Innit.

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I interpret this as being that countries like Germany (and Japan, China etc.) will effectively be exporting their deflation to us in terms of reduced product prices, so that any previous inflationary effect on imports caused by the earlier devaluation of sterling will be nullified or reversed.

Innit.

And combined with demand destruction and lowered standard of living in the UK... most definitely.

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