Japan Overcomes Deflation For First Time In Two Years

[interestrateripoff]

http://www.guardian.co.uk/business/2011/may/27/japan-overcomes-deflation-food-energy-shortages

Japan has overcome deflation for the first time in more than two years, but only because of food and energy shortages caused by the tsunami.

Japan has been battling deflation, or falling prices, for more than a decade. With Japanese consumers reluctant to go out and spend, deflation became entrenched in the late 1990s. A healthy economy needs to have a modest amount of inflation to keep growing. When prices are falling, consumers and businesses spend even less because they wait for things to become cheaper.

Ratings agency Fitch revised Japan's outlook to negative from stable this morning, warning about rising government debt and the risk to the public finances from the still unknown costs of the nuclear crisis at Fukushima. The yen fell against the dollar and the euro on the news.

A healthy economy doesn't need inflation.

[tomwatkins]

http://www.guardian.co.uk/business/2011/may/27/japan-overcomes-deflation-food-energy-shortages

A healthy economy doesn't need inflation.

Agreed. Why not have price stability like in the 40's and 50's? Didn't seem to do us much harm.

[Dorkins]

All posters on this thread please report to Threadneedle Street for re-education.

2% inflation is price stability, everybody knows that 2=0.

[thecrashingisles]

Japan has been battling deflation, or falling prices, for more than a decade.

They have enough problems with the earthquake and tsunami so it would be catastrophic if things started getting cheaper.

[billybong]

Japan has overcome deflation for the first time in more than two years, but only because of food and energy shortages caused by the tsunami.

For goodness sake don't give crazy UK politicians and the crazy BoE ideas on how to create inflation.

Edited May 27, 2011 by billybong

[thecrashingisles]

For goodness sake don't give crazy UK politicians and the crazy BoE ideas on how to create inflation.

I don't know. If we could give Mervyn the idea that him jumping off Beachy Head would create the required tsunami then it might do some good.

[General Congreve]

Are you lot crazy? What do you mean inflation doesn't equate to growth. Personally I am seeing fantastic economic growth thanks to inflation, in my own personal finances of course.

[onesmallstep]

this is mental

I mean what is going on

[interestrateripoff]

I don't know. If we could give Mervyn the idea that him jumping off Beachy Head would create the required tsunami then it might do some good.

One less central banker might push up the wages of the remaining central bankers, a very rare breed are the world central bankers.

[Pauly_Boy]

The BBC have been running with this as well! I bet the Japanese are delighted that the price of fuel is going up!

[Ash4781]

What a dreadful article.

[council dweller]

It will only last a few months while disruption caused by the earthquake clears. then it will be back to deflation again.

It probably took 10 or 20 years to recover from WW2 (high inflation after the war) but that was on an entirely different scale.

They'll just pick themselves up and stagger on.....

[Mr 0.01%]

What's the effect of deflation on Foreign Exchange? I've always fancied visiting Japan but consistently hear it works out to be £8 a pint etc.

[council dweller]

What's the effect of deflation on Foreign Exchange? I've always fancied visiting Japan but consistently hear it works out to be £8 a pint etc.

The foreign exchange rate is what it is, it's now 132 to the Gbp about the same as it was 3 months ago. A pint in a pub will cost you about 700 yen so order one pint and suck on it! What you're really paying for is floor space anyway.

[exiges]

2% inflation is price stability, everybody knows that 2=0.

2% bad. 4% good

[Orsino]

Thank heavens food prices are rising, otherwise people might starve themselves for several months in the hope that prices might fall.

Thank heavens energy prices are rising, otherwise people might shiver through the winter and only heat their houses in the summer.

Edited May 28, 2011 by Orsino

[interestrateripoff]

Thank heavens food prices are rising, otherwise people might starve themselves for several months in the hope that prices might fall.

Thank heavens energy prices are rising, otherwise people might shiver through the winter and only heat their houses in the summer.

I think you need to report to the nearest re-education centre.

Edited May 28, 2011 by interestrateripoff