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To: expat_panama
It's ALL about the Dollar/Euro/Yen......

Since late 2008 and into 2009 central bankers around the world have been fighting a losing battle against "Deflation".

The only tool they have is the printing press/QE*, which is designed to create "inflation" in order to stop the deflationary cycle. In the short run they are not necessarily wrong since it is really the only thing they can do.

The QE* efforts of the U.S. have sent the U.S. stock market to record highs but the utter lack of real economic growth suggests there are other forces at work.

Deflation is a Bitch.

 photo ia-deflation-cycle_zpsfxvikgkh.gif

16 posted on 01/25/2015 11:00:44 AM PST by Zeneta (Thoughts in time and out of season.)
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To: Zeneta
...only tool they have is the printing press/QE*, which is designed to create "inflation" in order to stop the deflationary cycle.

--and they did it, it seemed to work for a while, but now they're quitting and we're all watching the world's economy deflate, beginning now with negative interest rates.  The problem (imho) is that w/ all the printing the money supply hasn't made any serious moves.  Money's supposed to be created by econ activity and it's not there.  We especially see it in the fact that money-velocity has gone AWOL

18 posted on 01/25/2015 11:06:55 AM PST by expat_panama
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To: Zeneta

There are some who seem to think they’d benefit from deflation. Perhaps so, assuming no debt, ample savings and cash reserves, and your financial institutions don’t fail. That’s the biggie, failing financial institutions.


20 posted on 01/25/2015 11:11:27 AM PST by RegulatorCountry
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To: Zeneta

There is no such thing as a nongovernmental deflationary spiral. Historical US deflations end naturally, unless government gets involved.


40 posted on 01/26/2015 7:57:16 PM PST by 1010RD (First, Do No Harm)
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