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Imf Warns On Low Inflation, Calls On Ecb To Act

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http://uk.reuters.com/article/2014/04/02/uk-imf-economy-idUKBREA311BP20140402

The head of the International Monetary Fund on Wednesday called on the European Central Bank to ease monetary policy to move prices higher, saying "low-flation" in advanced economies risked undercutting an already sluggish global recovery.

IMF Managing Director Christine Lagarde said the world's economy should pick up pace to grow more than 3 percent this year and next. But she said risks, including low inflation in the euro zone, geopolitical tension in places like Ukraine, and market volatility, could prompt a prolonged period of sluggish growth.

ECB policymakers meet on Thursday and are not expected to announce any new measures to fight weakness in the euro zone economy, despite pressure to act to reverse a drop in the region's rate of inflation.

Increasing prices to save the world!

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IMF Managing Director Christine Lagarde said the world's economy should pick up pace to grow more than 3 percent this year and next. But she said risks, including low inflation in the euro zone, geopolitical tension in places like Ukraine, and market volatility, could prompt a prolonged period of sluggish growth.

Market volatility! It's a debt de-leveraging depression, fool. 2008 redivivus, but with the ChiComs and submerging markets on board this time too.

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Guest spp

She needs bigger numbers to tax...small numbers don't look so good on the balance sheet.

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Oh dear... people aren't supposed to buy things with lower prices.. and it leads to nothing but bad things ect ect (yawn yawn).

Price cuts aid first-quarter growth for euro zone businesses

Thu Apr 3, 2014

(Reuters) - Euro zone businesses started 2014 with their best quarter in three years, but buoyant growth came at a cost as they slashed prices to drum up trade, which could further stoke deflation fears.

http://www.reuters.com/article/2014/04/03/us-europe-economy-idUSBREA320PM20140403

Too many people only want gentle inflation (50+ years of that adds to a lot of inflation), that over time has allowed others to over-expand / be greedy, and hate thought of deflation breaking up the overstretched with too many assets / debt positions.

Interesting how excess, followed by deflationary realism, has seen Co-op put stuff on the market, including its said a load of farms. One of their farms the locals shouted down any idea about building homes (way away from the farms.itself... on siding to villages) in 2011. Co-op not super-badly needing the money then. Locals recently grumbling they'll have to do their protests all again. Now it's rumoured developers set to put in bids that Co-op will have to consider such bids for land plots (as much as said so themselves). Oh dear... excess followed by real world debt positions forces assets to be split up to others and allows change. How dare that happen. They should be building more international HQs and expanding with forever inflation. Save all the companies. There won't be new companies run by smarter people if they fail.

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Without inflation or growth there would be no profits, bonuses, pay rises.....either create money or create more people to spend more money....choices. ;)

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Asset prices will follow the price and revenue downwards and with the loans blowing up. I read a couple of weeks ago everything was fine in the eurozone and everything fixed and now looks like worse than ever. Not sure what the ecb did or said..

Edited by Ash4781

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Without inflation or growth there would be no profits, bonuses, pay rises.....either create money or create more people to spend more money....choices. ;)

How about allowing people to buy more with their money / less money?

And breaking up VI overstretched overexpanded positions. RBS has sold / will sell, lots of divisions it built up to other companies. Someone has.

So what if the loans blow up? The creditors will exchange what the debtors hold in exchange to come to a settlement. A little bit of give and take. Deflationary adjustment. Give this creditor option of taking over, or positions in, failed distressed assets at low prices... businesses / hotels / land / public-sector assets to market.. in exchange for the money he is owed.

Better than than in hands of debtors who can't afford their current position, who have belief in forever HPI, and over-expanded. Equally deflationary adjust public sector pensions too, so similar buying power under deflation, but bringing down extent of obligations on Gov. Healthcare lower costs ect. Just new younger and more business entrants, leading to new healthy growth once deflation has bottomed out. House prices worth less. Too bad.

Debts are retired by paying them off, " restructuring" or default. In the first case, no value is lost; in the second, some value; in the third, all value. In desperately trying to raise cash to pay off loans, borrowers bring all kinds of assets to market, including stocks, bonds, commodities and real estate, causing their prices to plummet.

The process ends after the supply of credit falls to a level at which it is collateralised acceptably to the surviving creditors. Financial assets, and all other asset-classes of value, will be selectively repudiated by default, not obliterated by inflation.

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Asset prices will follow the price and revenue downwards and with the loans blowing up. I read a couple of weeks ago everything was fine in the eurozone and everything fixed and now looks like worse than ever. Not sure what the ecb did or said..

God how I want the EZ to blow up. I don`t care about how it affects me any more either (I don`t expect too much effect actually, maybe some higher savings rates?) I thought Farage`s comments the other night were interesting, about how it will end badly if it doesn`t end democratically. Can`t see many other mainstream politicians having the balls to say that on prime time television? (mainly because most of them are in the pockets of the EU, big business and banks?)

Edited "any" to "many", because more than Farage have said it, just not on such a big platform, and with specific reference to the rise of far right parties?

Edited by dances with sheeple

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How about allowing people to buy more with their money / less money?

And breaking up VI overstretched overexpanded positions. RBS has sold / will sell, lots of divisions it built up to other companies. Someone has.

So what if the loans blow up? The creditors will exchange what the debtors hold in exchange to come to a settlement. A little bit of give and take. Deflationary adjustment. Give this creditor option of taking over, or positions in, failed distressed assets at low prices... businesses / hotels / land / public-sector assets to market.. in exchange for the money he is owed.

Better than than in hands of debtors who can't afford their current position, who have belief in forever HPI, and over-expanded. Equally deflationary adjust public sector pensions too, so similar buying power under deflation, but bringing down extent of obligations on Gov. Healthcare lower costs ect. Just new younger and more business entrants, leading to new healthy growth once deflation has bottomed out. House prices worth less. Too bad.

The system as it stands does not allow for deflation to a greater degree....everything MUST continue to rise, inflate, increase, expand, grow year on year.......soon we will all be millionaires but poor......but that doesn't mean we can't collectively fight it, refuse to buy it. ;)

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The system as it stands does not allow for deflation to a greater degree....everything MUST continue to rise, inflate, increase, expand, grow year on year.......soon we will all be millionaires but poor......but that doesn't mean we can't collectively fight it, refuse to buy it. ;)

My view is it will withstand it. With a little bit of forgiveness by creditors, in exchange for positions in what comes to market at lower prices.

Markets are self-balancing, unless run to extremes, and that could be the case. Gov debt becomes more valuable with deflation.

I agree with the lefties that too much wealth/monies is going to a smaller core of people. Under current policies of chasing inflation (0.5% QE forbearance), looking for growth. And unhealthily rewarding connected people in some instances, or those very close to the entire process. How can what you describe be healthy for the majority of independent younger people (with certain exceptions)?

Can Largarde not take a pay-cut on what I recall she was paid net tax. And already worth something like £3m-£4m on one estimate I read, although I don't begrudge her rise as a lawyer in male-dominated sector of the time, told she would never become partner as a woman. That required change to be forced on VI companies resisting it. Or handover position to someone else in future who doesn't require such an income for policies I certainly disagree with - assuming she isn't actually saying the opposite of what they're really going to go for, just to please the VIs.

The growth after deflation has bottomed out would be very impressive imo. Think of all that new volume of lending on so many over-valued homes, most owned outright (nearly outright).. The Gov debt would be manageable post-deflation, into new growth. More assets split up in hands of new younger interests, borrowing at lower price levels, but overall more borrowing, year on year, with older and overstretched VI losing out (together with those currently chasing yield in a high risk deflationary outlook situation).

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If the policies are right, would you pick a place where things have been allowed to fall back to balance and where there is room for growth and better future prosperity or accept the top with very little room for slow manoeuvre.......some places are now at the start of a re-boom surely they are the better places to be right now? ;)

Edited by winkie

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If the policies are right, would you pick a place where things have been allowed to fall back to balance and where there is room for growth and better future prosperity or accept the top with very little room for slow manoeuvre.......some places are now at the start of a re-boom surely they are the better places to be right now? ;)

I'm holding on. It's only going to be deflation. It also aligns with wealth (financial wealth - which is way more important than asset wealth - imo), ultimately. Some of them been just bolstering their positions into the reflation - before deflation.

Which places for this re-boom? What better places to be right now (market position wise)? "Soon we will all be millionaires but poor......but that doesn't mean we can't collectively fight it, refuse to buy it." - yes... that's the only option on how to resist, as the yield hunters continue to malinvest,

Spain perhaps..more gradual deflation for years to come, but attracting funds and investment, with rebalancing along the way?

Spain looks to ECB to avoid deflation

Financial Times ‎- 1 day ago

Both the Bank of Spain and private sector forecasters said it was almost unimaginable that the country could fall into outright deflation.

ECBs deflation paralysis drives Italy, France and Spain into debt traps

Frankfurt could force down the euro at any time by signalling a determination to do something about its predicament. It has chosen not to do so

By Ambrose Evans-Pritchard

9:47PM BST 02 Apr 2014

Comments414 Comments

The European Central Bank has let it happen. Deflation has been running at an annual rate of -1.5pc in the eurozone over the past five months, when adjusted for austerity taxes.

Prices have been falling at a pace of 6.5pc in Greece, 5.6pc in Italy, 4.7pc in Spain, 4pc in Portugal, 3pc in Slovenia and nearly 2pc in Holland since September, based on my rough calculations (annualised) of Eurostat monthly data.

My entire position (backed to the hilt with my finances) is one that they're all going for deflation, no matter what they throw out to make VI inflation-requriring asset holders/over-stretched feel better on protecting their interests.

This guy seems to favour monetary stimulus, and jobs guarantees, and prevention of "human suffering" with policies of "proven failed austerity measures" Human suffering doesn't exist where more and more young people paying to rent on over-valued property, confronted by super-high house prices, and older people holding much of the wealth?????

Yet at least he has picked up some clues and has 'concern' the authorities are working against the stimulus inflation position in the background. Which is my bet, over the longer term (preferably quick but perhaps over 25 years), will be the policy chosen.. Let's just pay that Welsh landlord (wealth-coach) loads of taxpayer money for all those houses, many to benefit claimants, with forever inflation.

OpEdNews Op Eds 4/2/2014

Dr. Draghi Prescribes a Dose of Deflation for Spain as his latest Quack Cure

.. Here are the two extraordinary aspects of Draghi's praise for deflation as the solution to Spain's Great Depression level of unemployment. One, Draghi's pro-deflation policy contradicts the ECB's anti-deflation policy. That explains the strangest puzzle economists have had about the troika.

The troika's practices are insane under their own written policies. Under their stated policies they should have -- over a year ago -- adopted maximum monetary stimulus. Instead, they have been claiming that they are waiting to intervene until the eurozone is minutes from sinking into deflation. The troika has also been claiming that if this intervention comes a minute too late the results will be disastrous because the intervention will likely fail.

"Mr. Draghi has said low inflation is concentrated in crisis countries where falling prices are welcome and necessary to regain competitiveness on world export markets."
Edited by Venger

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