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U S In 8th Month Of Deflation--eurozone Also Deflating

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http://www.telegraph.co.uk/finance/newsbys...ation-trap.html

Europe and US still at risk from deflation trap

The developed world has not shaken off the risk of sliding into a deflation trap, experts warned after new figures showed that prices in both the eurozone and the US are falling.

By Edmund "Eddy" Conway, Economics Editor

Published: 5:54PM BST 14 Aug 2009

Consumer prices in America slipped by 2.1pc in the year to July, according to official data released yesterday. It coincided with Eurostat figures showing that the eurozone's consumer price index dropped by 0.7pc in the past year, compared with deflation of 0.1pc in June.

The figures underline concerns that despite the sharp rebound in a variety of economic indicators, and despite news that France and Germany have both now pulled out of recession, the threat posed by deflation has not yet been extinguished. Indeed, the fall in consumer prices over the past year in the US represents the biggest such drop since January 1950, and means that the country has now been in deflation for eight months.

Deflation it is then? This should send a signal to all those invested in property or with large mortages to get out NOW--if you can. Might not be a bad idea to divest a few inflation hedges too as the price per ounce has long since peaked.

This will add to the misery of rapidly growing unemployment.* A witches brew for house prices.

__________________________

* :( Sad state of affairs for so many.

Edited by Realistbear

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Guest Daddy Bear
Deflation it is then? This should send a signal to all those invested in property or with large mortages to get out NOW--if you can. Might not be a bad idea to divest a few inflation hedges too as the price per ounce has long since peaked.

With a rapid devaluation of dollar (either natural or formal devaluation) and continuous QE, ZIRP, bailouts and possible negative nominal interest rates, and other tricks up their sleeve - sustained deflation is not going to happen.

The time to divest property was 2 years ago - now is the time to get the str fund back in at 30% below or into a variety of commodities and maybe a tickle of gold.

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With a rapid devaluation of dollar (either natural or formal devaluation) and continuous QE, ZIRP, bailouts and possible negative nominal interest rates, and other tricks up their sleeve - sustained deflation is not going to happen.

The time to divest property was 2 years ago - now is the time to get the str fund back in at 30% below or into a variety of commodities and maybe a tickle of gold.

The QE and ZIRP aint gonna touch us guv.

its numbers to balance the books and a way to maximise profit on wot loans dey do make guv.

its called a "repression"

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I wish someone would let the supermarkets know that prices should be falling because they seem to be defying your assumption. Im glad i dont leave anything on my credit card at the end of the month because interest rates are certanly not deflating.

When will petrol deflate? and what about all the utility bills going up and up, or is this just deflation for the rich consumer of luxury goods.

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I wish someone would let the supermarkets know that prices should be falling because they seem to be defying your assumption. Im glad i dont leave anything on my credit card at the end of the month because interest rates are certanly not deflating.

When will petrol deflate? and what about all the utility bills going up and up, or is this just deflation for the rich consumer of luxury goods.

this is a bust phase of the cycle of boom and bust. its just a bit embarrasing for the government who had eliminated it...

low order goods rise in a bust....food, fuel and nik naks.

high order items fall...houses, cars, boats, planes, governments.

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Guest Daddy Bear
By Edmund "Eddy" Conway, Economics Editor

Published: 5:54PM BST 14 Aug 2009

Consumer prices in America slipped by 2.1pc in the year to July, according to official data released yesterday. It coincided with Eurostat figures showing that the eurozone's consumer price index dropped by 0.7pc in the past year, compared with deflation of 0.1pc in June.

The figures underline concerns that despite the sharp rebound in a variety of economic indicators, and despite news that France and Germany have both now pulled out of recession, the threat posed by deflation has not yet been extinguished. Indeed, the fall in consumer prices over the past year in the US represents the biggest such drop since January 1950, and means that the country has now been in deflation for eight months. [/i]

Deflation it is then? This should send a signal to all those invested in property or with large mortages to get out NOW--if you can. Might not be a bad idea to divest a few inflation hedges too as the price per ounce has long since peaked.

and means that the country has now been in deflation for eight months. [/i]

Hmmm.... utter bollux

Deflation?

I don't think so.

Here is inflation data for the last two years in the US

Monthly Inflation Rate in US

January 2007 0.31%

February 2007 0.54%

March 2007 0.91%

April 2007 0.65%

May 2007 0.61%

June 2007 0.19%

July 2007 -0.03%

August 2007 -0.18%

September 2007 0.28%

October 2007 0.21%

November 2007 0.59%

December 2007 -0.07%

January 2008 0.50%

February 2008 0.29%

March 2008 0.87%

April 2008 0.61%

May 2008 0.84%

June 2008 1.01%

July 2008 0.53%

August 2008 -0.40%

September 2008 -0.14%

October 2008 -1.01%

November 2008 -1.92%

December 2008 -1.03%

January 2009 0.44%

February 2009 0.50%

March 2009 0.24%

April 2009 0.25%

May 2009 0.29%

June 2009 0.86%

Based on last months figure of 0.86% thats an annualised inflation rate of 10% !!

Based on the last 4 months figures of 1.65% thats >5% annualised

The trend is for inflation

Headline rate in US will be circa 5% by year end

Fact is personal inflation is actually around 10% for the average american at the moment

Anyway these figures are all bogus to start with - do not trust the government !

Edited by Daddy Bear

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Hmmm.... utter bollux

Deflation?

I don't think so.

Here is inflation data for the last two years in the US

Monthly Inflation Rate in US

January 2007 0.31%

February 2007 0.54%

March 2007 0.91%

April 2007 0.65%

May 2007 0.61%

June 2007 0.19%

July 2007 -0.03%

August 2007 -0.18%

September 2007 0.28%

October 2007 0.21%

November 2007 0.59%

December 2007 -0.07%

January 2008 0.50%

February 2008 0.29%

March 2008 0.87%

April 2008 0.61%

May 2008 0.84%

June 2008 1.01%

July 2008 0.53%

August 2008 -0.40%

September 2008 -0.14%

October 2008 -1.01%

November 2008 -1.92%

December 2008 -1.03%

January 2009 0.44%

February 2009 0.50%

March 2009 0.24%

April 2009 0.25%

May 2009 0.29%

June 2009 0.86%

Based on last months figure of 0.86% thats an annualised inflation rate of 10% !!

Based on the last 4 months figures of 1.65% thats >5% annualised

The trend is for inflation

Headline rate in US will be circa 5% by year end

Fact is personal inflation is actually around 10% for the average american at the moment

Anyway these figures are all bogus to start with - do not trust the government !

CPI DB...pesky ipods and memory sticks mucking up the theory.

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Exactly right Bloo.

Cheap Chinese labour driving reductions in manufactured goods. Leads to lower wages and lower interest rates.

Lower rates lead to easy money and speculation in commodites and stocks leading to bubbles and busts in these items.

Inflation/deflation or even biflation don't adequately describe what we are experiencing - a new word needs to enter the lexicon.

we have a word....BUST.

or a cover up is occuring...a repression!

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Guest happy?
Exactly right Bloo.

Cheap Chinese labour driving reductions in manufactured goods. Leads to lower wages and lower interest rates.

Lower rates lead to easy money and speculation in commodites and stocks leading to bubbles and busts in these items.

Inflation/deflation or even biflation don't adequately describe what we are experiencing - a new word needs to enter the lexicon.

"lifestyle-inflation" (because you're worth it).

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I'm sure the global recovery led by France and Germany will save the day.

I was following "the bank of France " press statements for the month of July after what i read they said that the PIB for France would be -0.4%

Then a mircale happened we are now +0.3% according to the Sarko media

The bank of France figures have vanished they were never published for the month of July

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Hmmm.... utter bollux

Deflation?

I don't think so.

Here is inflation data for the last two years in the US

Monthly Inflation Rate in US

January 2007 0.31%

February 2007 0.54%

March 2007 0.91%

April 2007 0.65%

May 2007 0.61%

June 2007 0.19%

July 2007 -0.03%

August 2007 -0.18%

September 2007 0.28%

October 2007 0.21%

November 2007 0.59%

December 2007 -0.07%

January 2008 0.50%

February 2008 0.29%

March 2008 0.87%

April 2008 0.61%

May 2008 0.84%

June 2008 1.01%

July 2008 0.53%

August 2008 -0.40%

September 2008 -0.14%

October 2008 -1.01%

November 2008 -1.92%

December 2008 -1.03%

January 2009 0.44%

February 2009 0.50%

March 2009 0.24%

April 2009 0.25%

May 2009 0.29%

June 2009 0.86%

Based on last months figure of 0.86% thats an annualised inflation rate of 10% !!

Based on the last 4 months figures of 1.65% thats >5% annualised

The trend is for inflation

Headline rate in US will be circa 5% by year end

Fact is personal inflation is actually around 10% for the average american at the moment

Anyway these figures are all bogus to start with - do not trust the government !

I don't know where you get your figures from,they don't agree to these.

http://www.bls.gov/news.release/cpi.nr0.htm

Also , your figures have been annualised already.

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Hmmm.... utter bollux

Deflation?

I don't think so.

Here is inflation data for the last two years in the US

Monthly Inflation Rate in US

January 2007 0.31%

February 2007 0.54%

March 2007 0.91%

April 2007 0.65%

May 2007 0.61%

June 2007 0.19%

July 2007 -0.03%

August 2007 -0.18%

September 2007 0.28%

October 2007 0.21%

November 2007 0.59%

December 2007 -0.07%

January 2008 0.50%

February 2008 0.29%

March 2008 0.87%

April 2008 0.61%

May 2008 0.84%

June 2008 1.01%

July 2008 0.53%

August 2008 -0.40%

September 2008 -0.14%

October 2008 -1.01%

November 2008 -1.92%

December 2008 -1.03%

January 2009 0.44%

February 2009 0.50%

March 2009 0.24%

April 2009 0.25%

May 2009 0.29%

June 2009 0.86%

Based on last months figure of 0.86% thats an annualised inflation rate of 10% !!

Based on the last 4 months figures of 1.65% thats >5% annualised

The trend is for inflation

Headline rate in US will be circa 5% by year end

Fact is personal inflation is actually around 10% for the average american at the moment

Anyway these figures are all bogus to start with - do not trust the government !

DB, I still agree with you sig. I am starting to think about where and how cash should be turned into assets. Right now the QE etc has had little effect, but it will in matter of time.

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Hmmm.... utter bollux

Deflation?

I don't think so.

Here is inflation data for the last two years in the US

Monthly Inflation Rate in US

January 2007 0.31%

February 2007 0.54%

March 2007 0.91%

April 2007 0.65%

May 2007 0.61%

June 2007 0.19%

July 2007 -0.03%

August 2007 -0.18%

September 2007 0.28%

October 2007 0.21%

November 2007 0.59%

December 2007 -0.07%

January 2008 0.50%

February 2008 0.29%

March 2008 0.87%

April 2008 0.61%

May 2008 0.84%

June 2008 1.01%

July 2008 0.53%

August 2008 -0.40%

September 2008 -0.14%

October 2008 -1.01%

November 2008 -1.92%

December 2008 -1.03%

January 2009 0.44%

February 2009 0.50%

March 2009 0.24%

April 2009 0.25%

May 2009 0.29%

June 2009 0.86%

Based on last months figure of 0.86% thats an annualised inflation rate of 10% !!

Based on the last 4 months figures of 1.65% thats >5% annualised

The trend is for inflation

Headline rate in US will be circa 5% by year end

Fact is personal inflation is actually around 10% for the average american at the moment

Anyway these figures are all bogus to start with - do not trust the government !

And why would I trust a stranger on an Internet forum instead?

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the gov't has rather obvious incentives to understate inflation.

That doesn't make an anonymous stranger on an Internet forum logically correct though does it? If truth be known, we've had massive inflation since the early 1970s. The curve that shows the increase in the money supply clearly shows this. If we were going to have hyperinflation it would already have happened.

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why?

Because all the conditions for it to manifest have already passed. The opposite is now happening as demand for money falls (due to massive indebtedness). High inflation has happened, it's just been masked because the liquidity was taken up by housing.

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We've already had the inflation. The government replacing lost cash flows isn't going to change that.

:)

They never happened.

:)

Now they will.

Edited by Injin

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What I suspect:

US stock market 1982-2000, big boom, deflationary trend. Inflationary correction, housing bubble etc 2000-2008, recession, 2009-??? deflationary trend, further advance on the 1982-2000 boom in the stock market.

The good thing about deflation is that it increases profit margins IF it comes after an inflationary trend, where consumers, companies, etc have been squeezed by inflation...

deflation after deflation, like in 1929, is problematic, not deflation after inflation, that gives boom conditions.

the 1950's and 80's had huge government deficients in the US. Low inflation, deflation in commodities, booming stock markets.

Edited by carseller

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Because all the conditions for it to manifest have already passed. The opposite is now happening as demand for money falls

falling demand for money is inflationary. falling demand puts downward pressure on value, obviously.

demand for money falls (due to massive indebtedness).

no, demand for money is falling because tax revenues are falling-off a cliff.

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no, demand for money is falling because tax revenues are falling-off a cliff.

The term I have been told by a reasonably reliable source is that the general population (uk/us) has basically said "this is ********" and isn't even filing returns.

They are ******ed. Taxes are vanishing.

Raw printing No ability under current social conditions to apply more force.

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The term I have been told by a reasonably reliable source is that the general population (uk/us) has basically said "this is ********" and isn't even filing returns.

They are ******ed. Taxes are vanishing.

Raw printing No ability under current social conditions to apply more force.

not printy printy!!!!

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