Free Republic

It is not just the Trump Tariffs The concept of "involution" in China—where intense competition leads to diminishing returns without meaningful progress—ties closely to a deflationary spiral. It’s a vicious cycle: overcapacity, weak domestic demand, and cutthroat price wars drive prices down, eroding profits, discouraging investment, and further dampening consumption. This isn’t just a recent phenomenon; China’s economic challenges have been brewing for nearly a decade, predating the tariff wars often scapegoated for the downturn. Involution and Deflationary Spiral Involution, or nei juan, reflects a structural issue where resources are poured into hyper-competitive sectors—like solar panels, electric vehicles, or real...

Federal Reserve Chairman Ben Bernanke clearly worries about a deflationary spiral. That explains, in part, his push for and vigorous defense of so-called quantitative easing. St. Louis Federal Reserve President James Bullard has also expressed deflation concerns, as has Eric Rosengren, president of Boston’s Federal Reserve Bank. Smart Money magazine, in its October issue, published poll results showing that 40 percent of respondents are worried about deflation, with one of its columnists writing that the “latest scare for already nervous investors … is deflation.” It is true that price-level measures have indeed been subdued. The Consumer Price Index (CPI) showed...

NEW YORK (Reuters) - Stocks fell on Tuesday as a surprising drop in retail sales dented hopes that the recession was abating and financial shares slid on fears that a stock offering by Goldman Sachs could prompt others to follow suit. Retail sales in March snapped two months of gains and sparked selling across the board, with shares of retailers, big manufacturers and energy companies among the casualties. Financials, which have led the stock market's five-week rebound from 12-year lows, took the biggest beating by far, with the KBW Bank index falling 8.2 percent. Goldman Sachs (Symbol : GS Loading......