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Riksbank Won’T Tolerate More Price Shocks, Af Jochnick Says

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http://www.bloomberg.com/news/2014-04-27/swedish-riksbank-won-t-tolerate-more-price-shocks-jochnick-says.html

Sweden’s Riksbank will need to ease monetary policy further should prices continue to fall more than policy makers forecast, First Deputy Governor Kerstin af Jochnick signaled.

“At these low levels it’s important that we end up at roughly the forecasts we’ve made,” she said in an interview on April 25, after a speech in Sundsvall, Sweden. “We’ve received data which was significantly lower than our forecast, so the tolerance for even lower inflation data is pretty small.”

In an effort to ward off deflation in the largest Nordic economy, the Riksbank this month signaled greater willingness to cut rates, and delayed tightening plans until the second quarter of next year. Consumer prices, which have risen less than the bank’s 2 percent target for more than two years, sank 0.6 percent in March on an annual basis, twice as much as the Riksbank predicted. The developments prompted Nobel Laureate Paul Krugman to warn that Sweden is facing a Japanese-style deflationary trap.

It seems the world is gripped by the terror of deflation. The sprectre of unbridled inflation isn't an issue, however prices can't fall forever.

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The Swedes are printing ?

The turnips at the BoE have stopped.

Not really.

What is HTB and HTB2 if not a different sort of printing?

It all magicks money into existence.

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Not really.

What is HTB and HTB2 if not a different sort of printing?

It all magicks money into existence.

It brings forward spending so it's more like a fractional reserve loan, only difference is that you and I are on the hook for the default.

Sub-prime government loans is what we now seem to have, where the banks can't loose and the builders ( and them at the top of the housing pyramid ) profit

The bankers must be laughing up their sleeve at us all.

Edited by TheCountOfNowhere

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It seems the world is gripped by the terror of deflation. The sprectre of unbridled inflation isn't an issue, however prices can't fall forever.

This guy doesn't agree, he sees pricing power being decimated by technology resulting in a new paradigm;

In his latest book, Jeremy Rifkin argues that the private market's drive for productivity has brought us closer to a world in which the marginal cost to produce just about everything will inch closer and closer to zero.

Rifkin argues that the private market's drive for efficiency and productivity has brought us ever closer to a world in which the marginal cost to produce just about everything will inch closer and closer to zero.

Picture factories run entirely by robots, powered by renewable energy sources like wind and the sun, creating products delivered by driverless vehicles, also run on renewable energy. Maybe these products won't even need to make any kind of journey at all. Perhaps they can simply be produced at your home or a few blocks away with the help of a 3-D printer.

Speaking of your home, in Rifkin's new world, your next one may very well be built by locally generated, 3-D-printed materials, in record time, removing the considerable expense of transporting construction goods. Rifkin cites an MIT lab that is working to develop a house frame in a single day "with virtually no human labor." An equivalent frame, Rifkin says, "would take an entire construction crew a month to put up."

This is a technological utopia brought to you by the convergence of what Rifkin calls the Communications Internet (how information is shared), the Energy Internet (how energy needs are shared and energy itself is distributed), and the Logistics Internet (how products are built and delivered), all equaling the so-called Internet of Things.

Granted, the initial cost of building such a system will be substantial. But once it's up and running, Rifkin argues, the benefits will fundamentally reshape our economic order. "The Internet of Things is already boosting productivity to the point where the marginal cost of producing many goods and services is nearly zero, making them practically free," Rifkin writes. "The result is corporate profits are beginning to dry up, property rights are weakening, and an economy based on scarcity is slowly giving way to an economy of abundance."

http://management.fortune.cnn.com/2014/04/23/capitalism-economy-jeremy-rifkin/

I'm not sure he's right,sadly, especially on the energy front- but there is an irony that the closer our system approaches it's much vaunted aim of abolishing scarcity, the more dysfunctional it becomes.

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