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Another "worst Since Lehman" Moment: 70% Of The "developed" World Has Inflation Less Than 0.5%

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http://www.zerohedge.com/news/2015-03-23/70-developed-world-has-inflation-less-05

Overnight Bank of America finally acknowledged just this "wildcard" and not only cut its outlook on Chinese stocks to "neutral", but had this to say:

Our recurrent theme is that most of the world is “old, indebted and unequal”.
In our view this is a recipe for debt deflation and weak nominal earnings/economic growth.
Proactive central banks figure this out early and fight the inevitable slowdown by implementing QE and weaker currencies.
They grab the other guy’s pizza slice.
Their asset markets soar. As Figure 5 shows, 70% of the world’s developed markets have inflation below 0.5% – almost as high as the depths of the 2008 financial crisis.
So the USD8.6tn in central bank balance sheet
expansion (from the Fed, ECB, BOE, BoJ, and PBoC, which amounts to 130% growth over Dec-07 to now) has been unable to get inflation going.
Remember: most of the planet is Old, Indebted and Unequal – a recipe for slow nominal growth. That failure to ignite inflation is unlikely to stop central banks from trying QE/QE variants.
Asset prices should be well supported by their (fruitless) endeavor wherever it is undertaken, like Japan and Europe currently
. Emerging markets are not much better – as Figure 6 shows, about 70% have deflation in their PPIs. According to McKinsey, overall debt has increased by USD57tn in mid-2014 from USD142tn in 2007.
China’s total debt has nearly quadrupled, rising to USD28tn by mid-2014, from USD7tn in 2007, fueled by real estate and shadow banking. Debt plus d

eflation is equal to debt deflation.

inflation%20under%200.5_0.jpg

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Analysts expect the UK’s consumer price inflation (CPI) figure for February, which is released on Tuesday, to fall from 0.3% in January, driven by lower energy and food prices. Some economists think the monthly update from the Office for National Statistics could already show deflation. http://www.theguardian.com/business/2015/mar/22/falling-energy-and-food-prices-push-uk-towards-deflation

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100% of the developed world is significantly reliant on oil, the price of which has just crashed, so low inflation is hardly a surprise. Before the 20th century and fiat money, deflation was quite common (as common as inflation on average) and the world still managed to develop.

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Yes, they are expecting 0.1% tomorrow and minus next month.

Once deflation starts it`s hellishly difficult to pull out of.

As I`ve mentioned before I go to a fleamarket every sunday. I very seldom buy anything but managed to buy a working black and decker strimer for £1. I`m living in 1932 already!

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But but but Keiser, Schiff, ZH, MW and the Austrians told us time and time and time again we were heading ro hyperinflation. Posters on here said again and again govt bonds would collapse.

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Am I correct in assuming that deflation is good for the general public but bad for bankers with stocks and assets?

Schiff says that no rational person would complain about rent and other prices going down.

I think we will see hyperinflation Twitterati, especially if they decide to fight deflation with massive QE. Bankers don't want deflation but also they don't want hyperinflation because they'd have to raise rates. Must be tough being a central bank these days :P

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But but but Keiser, Schiff, ZH, MW and the Austrians told us time and time and time again we were heading ro hyperinflation. Posters on here said again and again govt bonds would collapse.

To be fair, they'll be right one day. It's the inevitable outcome. Depends how quickly governments get desperate.

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Am I correct in assuming that deflation is good for the general public but bad for bankers with stocks and assets?

Schiff says that no rational person would complain about rent and other prices going down.

I think we will see hyperinflation Twitterati, especially if they decide to fight deflation with massive QE. Bankers don't want deflation but also they don't want hyperinflation because they'd have to raise rates. Must be tough being a central bank these days :P

IN theory deflation is good, but this time around imho it means that central banks will drop interest rates and that more QE will happen.

Hence less chance of a house price crash.

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