Ah, but that isn't for lack of trying. The Bank of China is still cranking up the [figurative] printing presses, but the Chinese people just don't want to borrow. Ditto the Europeans -- why borrow when there's such a low prospect of profits?.
There is always a market for people wanting to go into debt. The Bank of China does not issue new debt (and they don't print money) - they issue currency against Treasury securities.
The Europeans are in a very bad way. They're all stuck on the Euro - and yet there is no way to issue "federal level" Eurozone debt. They can only create new debt on an individual nation basis - and they don't trust each other to all work together in the seeking of that new debt. That's why we hear so much about the desire to create a "Eurobond" that simulates what we have with our Federal government issuing debt that promises the future labor of the individual citizens of the various states.
Nonetheless, just as in the U.S., where business won't borrow, either, the inflation will show up in assets: stock market, land, housing, art, etc..
How will this inflation produce itself? New debt issuance is struggling to stay ahead of the combination of debt repayment and bankruptcies. Monetary inflation is only possible through massive amounts of new debt. What happens when this stops? The equities market crashes and the US dollar index skyrockets - while gold and silver fall through the floor.
Many businesses aren't borrowing because they're scared and many of the rest can't qualify anymore.
We're a ways off from deflation. And I say that with disappointment. Deflation is a good thing -- it means the value of the currency is rising.
No, deflation is already here - being hidden by Federal debt at the level of 2 Trillion per year (even though they have instituted fancy bookkeeping in the last few years to pretend its not that high).
Deflation is a very, very bad thing. Buyers stop purchasing - knowing that the price on a widget will most likely drop some more in the coming days. Those with existing debt get slammed, as job losses mount, pay decreases, and work weeks shrink. They become trapped. Bankruptcies only add to the problem, by decreasing the money supply further. Everything feeds on itself - which is why it's known as a deflationary spiral. Japan has been trying to get out of theirs for 25 years...
Rising currency during deflation just means that the money supply is shrinking against a set of goods and services - making each unit of currency possibly purchase more. However, their can be segments of price inflation, as companies get to the point where they have cut everything to the bone - and can either raise prices in one last attempt at solvency - or go bankrupt.
If the interest rate is low enough, yes.
The Bank of China does not issue new debt (and they don't print money) - they issue currency against Treasury securities.
Yes. That's called "making new money". Why the heck else would they do it?
That's why we hear so much about the desire to create a "Eurobond" that simulates what we have with our Federal government issuing debt that promises the future labor of the individual citizens of the various states.
When the bureaucrats in Brussels finally get the OK to issue Eurobonds, the last shreds of monetary discipline will be lost. That is, of course, what they want. The permission to print freely.
How will this inflation produce itself?
M1 has increased by 60% in the last three years. That's real money in circulation that the Fed has created or enabled to be created despite your insistence that it hasn't. Are you going to sit there and tell me that the stock markets aren't in a bubble?
Wish I'd had some real estate to sell you in 2007.