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Japan's Deflation Continues As Prices Fall

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http://www.bbc.co.uk/news/business-11844483

Japanese consumer prices fell for the 20th month in a row in October, further evidence that the government is struggling to combat the deflation that is undermining economic recovery.

The core consumer price index fell by 0.6% compared with a year earlier, official figures showed.

This was a slight improvement on the 1.1% price falls seen in September.

Deflation is particularly damaging to economic growth as consumers delay purchases until prices fall further.

The improvement from September does not reflect any improvement in consumer demand, analysts said.

"Even though the pace of the fall in prices slowed by 0.5% percentage points, this was not due to an improved demand-supply balance," said Asushi Matsumoto at the Mizuho Research Institute.

Instead, he said, it was down to one-off factors, such as a hike in cigarette prices.

This means that "exit from deflation will be slower than previously thought," Mr Matsumoto argued.

Deflation is part of the normal economic cycle, it cannot be avoid you cannot have perpetual inflation.

Must always have higher prices it's what an indebted economic system relies upon.

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Deflation is particularly damaging to economic growth as consumers delay purchases until prices fall further.

Total ******ing canard of an argument.

Since the 50's (when govt. budget would creak at the cost of computing power) consumers around the world have been eagerly awaiting for the price of computers to go up before buying one haven't they? If they had increased in price the market for computers might have been the same as the head of IBM once predicted, in single digits, rather than 10's millions.

Edited by OnlyMe

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i cant fathom why they continue to swim upstream, when floating back serenely to a balance of demand and prices will be so easy and enjoyable.

Maybe not for the power boat builders, the bankers, but, who cares about them....someone does, obviously.

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http://www.bbc.co.uk/news/business-11844483

Japan's parliament has passed a stimulus package worth about $61bn (£39bn), designed to kick-start the country's fragile economic recovery.

The stimulus was designed to create jobs, Prime Minister Nato Kan said, through measures to help small businesses and boost consumer spending.

The government has already introduced several stimulus packages.

Earlier, figures showed that Japanese consumer prices fell for the 20th month in a row in October.

The vote in favour of the latest stimulus measures represents a victory for the government, which has struggled to get the package through parliament.

The move is in marked contrast to European governments' policies, which are focusing on cutting spending to secure growth.

Japan has been kickstarting it's economy for 20 years doing the same thing over and over again. This time however it will be different.

This time it WILL WORK....

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Japan's population is getting older and buying less stuff. There's nothing to kickstart. Most of the western world is getting older and buying less stuff........

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http://www.bbc.co.uk/news/business-11844483

Deflation is part of the normal economic cycle, it cannot be avoid you cannot have perpetual inflation.

Must always have higher prices it's what an indebted economic system relies upon.

You spin these daily newsclips like they are gospel.

When were you last in Japan?

I was there earlier this month with my my 2008 Rough Guide and Lonely Planet.

What did I find? The basic tube Journey in Tokyo and Osaka as well as Tram in Nagasaki all up around 30-50 Yen per single trip on 2008 (approx 10-20%).

The 2008 guides say a bento box in the stations is around 500Yen. You'll be lucky. 800 typically with the odd one at 500yen but some at 1000yen.

I asked my Japanese friend what was falling in price, she said generally clothes, consumer goods.

Beer is stagnant at around 800 yen a pint and 190yen a bottle in the shop.

General day to day food, transportation and fuel is rising in Japan. As here.

We live in an inflationary world. don't let any news real tell you otherwise....

Edited by ringledman

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General day to day food, transportation and fuel is rising in Japan. As here.

Surely the solution is edible iPods? Yellow ones will be lemon flavored, red = strawberry etc.

And the Japanese are just the people to develop it.

LINK

That'll make deflation easier to swallow.

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You spin these daily newsclips like they are gospel.

When were you last in Japan?

I was there earlier this month with my my 2008 Rough Guide and Lonely Planet.

What did I find? The basic tube Journey in Tokyo and Osaka as well as Tram in Nagasaki all up around 30-50 Yen per single trip on 2008 (approx 10-20%).

The 2008 guides say a bento box in the stations is around 500Yen. You'll be lucky. 800 typically with the odd one at 500yen but some at 1000yen.

I asked my Japanese friend what was falling in price, she said generally clothes, consumer goods.

Beer is stagnant at around 800 yen a pint and 190yen a bottle in the shop.

General day to day food, transportation and fuel is rising in Japan. As here.

We live in an inflationary world. don't let any news real tell you otherwise....

The point is they are still trying a failed economic policy of creating yet more stimulus.

Deflation will ultimately happen, it always does. Yes there will be a high period of inflation first but you will eventually get deflation in the end, then the cycle starts again.

Food / fuel are the ultimate items that we can't do without. If you were going to speculate to preserve your wealth these are the items you would invest in.

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Japan's population is getting older and buying less stuff. There's nothing to kickstart. Most of the western world is getting older and buying less stuff........

+1.75

IN A NUTSHELL

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The point is they are still trying a failed economic policy of creating yet more stimulus.

Deflation will ultimately happen, it always does. Yes there will be a high period of inflation first but you will eventually get deflation in the end, then the cycle starts again.

Food / fuel are the ultimate items that we can't do without. If you were going to speculate to preserve your wealth these are the items you would invest in.

If you actually look at the CPI data for the lost decade in Japan, even the official dodgy figures show

INFLATION

If the govt weather man tells you it's sunny, but you can see that it's actually raining, then take an umbrella!

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http://www.bbc.co.uk/news/business-11844483

Deflation is part of the normal economic cycle, it cannot be avoid you cannot have perpetual inflation.

Must always have higher prices it's what an indebted economic system relies upon.

You can have "perpetual" inflation as long as access to resources and markets keeps growing. There has been little if any monetary deflation in the UK and America, for instance, since the start of the industrial revolution. Even the 30s was a blip in historical terms. It happened because, although access to resources was still growing, overall, the rate at which debt-based money was being created was so vast that it outstripped, for a while, the capacity of the economy to grow on the back of those resources and so give the new debt-based money a new home to go to. And so, we had a temporary collapse.

This time really is different, this time the collapse will not be temporary because, not only have we had a massive inflation of the money supply via unrestrained FRB, but we are also facing a global resource crunch.

The worst of both worlds, in other words. So, yes, this time deflation is inevitable, in the end. On the way from here to there, though, it's perfectly possible we could have several monetary inflationary shocks as our leaders try to temporarily defy economic and geological gravity.

Edited by tallguy

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If you actually look at the CPI data for the lost decade in Japan, even the official dodgy figures show

INFLATION

If the govt weather man tells you it's sunny, but you can see that it's actually raining, then take an umbrella!

If food prices keep going up will people have more or less disposable income to spend in other areas? Will that be an inflationary event or a deflationary one?

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If food prices keep going up will people have more or less disposable income to spend in other areas? Will that be an inflationary event or a deflationary one?

What is happening right now is an inflation of the money supply for a select few and a deflation of the debt supply for the majority.

The majority live off debt

Edited by tallguy

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If food prices keep going up will people have more or less disposable income to spend in other areas? Will that be an inflationary event or a deflationary one?

You can't have sustained inflation without wage inflation. If one area inflates, it will inevitably lead to deflation in other areas, such as housing, for example.

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You can't have sustained inflation without wage inflation. If one area inflates, it will inevitably lead to deflation in other areas, such as housing, for example.

This I would agree with. Owned houses are not essential and they are also bought with debt. Anything that is not essential to own and is bought with debt will fall in price. Where inflationary driven prices rises (as well as real term-price rises due to resource contraints) will occur (indeed, are occuring) is in relation to anything bought with cash and is essential (food, fuel etc)

Edited by tallguy

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You can't have sustained inflation without wage inflation. If one area inflates, it will inevitably lead to deflation in other areas, such as housing, for example.

The other "release valve" is savings.

The savings pool in Japan divided by the population is roughly $150k per person. These savings are being drawn down at the moment to reconcile the differences between wages and living expenses.

I don't think that this "release valve" is as robust in the UK.

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  • 149 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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