Bloomberg’s Handy Guide To Why Falling Prices Are Horrible For You

Bloomberg’s Handy Guide To Why Falling Prices Are Horrible For You (ZeroHedge, Jan 22, 2015):

With almost perfect comedic timing, Bloomberg unleashed the mainstream media’s Draghi-confirming raison d’etre for QE… explainining why – shock horror – deflation is bad for you. No matter that the QE efforts of The Fed (and BoJ) entirely (totally and utterly) failed to spark any increase in inflation expectations, we must try try try again. However, despite the exuberant disgruntlement with deflation that Bloomberg offers, Portuguese economy minister Guindos had something ‘odd’ to say this morning: “European deflation is positive.” We are sure he will issue some clarifying statement soon enough walking back such a dangerous and anti-authority comment.

Read moreBloomberg’s Handy Guide To Why Falling Prices Are Horrible For You

Kudos To Bundesbank President Jens Weidmann For Uttering Three Truths In One Speech

Kudos To Herr Weidmann For Uttering Three Truths In One Speech (David Stockman’s Contra Corner, Oct 17, 2014):

Once in a blue moon officials commit truth in public, but the intrepid leader of Germany’s central bank has delivered a speech which let’s loose of three of them in a single go. Speaking at a conference in Riga, Latvia, Jens Weidmann put the kibosh on QE, low-flation and central bank interference in pricing of risky assets.

These days the Keynesian chorus in favor of policy activism is so boisterous that a succinct statement to the contrary rarely gets through – especially at Rupert Murdoch’s Wall Street yarn factory. But here’s what penetrated even Brian Blackstone’s filters:

“The biggest bottleneck for growth in the euro area is not monetary policy, nor is it the lack of fiscal stimulus: it is the structural barriers that impede competition, innovation and productivity,” he said.

Read moreKudos To Bundesbank President Jens Weidmann For Uttering Three Truths In One Speech

Clearly Europe Has A Crushing Deflation Problem… Oh Wait … It Says Rising Prices/Inflation

–  Clearly Europe Has A Crushing Deflation Problem… Oh Wait (ZeroHedge, Oct 4, 2014):

When Mario Draghi set off on his latest quest to slay Europe’s deflation monster, after an endless array of failed alphabet soup programs to inject money into stock markets mysteriously failed to fix Europe’s insolvent economy riddled by record unemployment and trillions in non-performing loans, he clearly was guided by this latest Eurobarometer survey of Public Opinion in the European Union, in which virtually everyone across the board admitted that the most important issue facing the common folk in Europe is plunging prices and crushing deflation.

rising prices

Oh wait… it says rising prices/inflation.

Well, that’s embarrassing. Please ignore everything we just said, because paradoxically to “fix” Europe, Mario Draghi is desperately trying to make Europe’s biggest problem even worse.  Or not: surely this is just a case when the 6 members of the ECB’s executive board “know better” than some 330 million Europeans.

Read moreClearly Europe Has A Crushing Deflation Problem… Oh Wait … It Says Rising Prices/Inflation

‘Everything We Are Told About Deflation Is A Lie’

“Everything we are told about deflation is a lie” (The Cobden Center, April 9, 2014):

“The European Central Bank has given its strongest signal yet that it is prepared to embrace quantitative easing to prevent the euro zone from sliding into deflation or even a prolonged period of low inflation.”
– ‘Draghi strengthens QE signal’, Financial Times, April 4, 2014.

Yes, heaven protect Europe’s embattled citizens and savers from a prolonged period of low inflation. How could they possibly survive it ?

Read more‘Everything We Are Told About Deflation Is A Lie’

Peter Schiff: Meet ‘LOWFLATION’: Deflation’s Scary Pal

dollar-euro

Meet ‘lowflation’: Deflation’s scary pal (RT, April 7, 2014):

Peter Schiff
By Peter Schiff

In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word “inflation.”

Whereas economists up until the 1960’s or 1970’s mostly defined inflation as an expansion of the money supply, the vast majority now see it as simply rising prices. Since then the “experts” have gone further and devised variations on the word “inflation” (such as “deflation,” “disinflation,” and “stagflation”). And while past central banking policy usually focused on “inflation fighting,” now bankers talk about “inflation ceilings” and more recently “inflation targets”. The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: “lowflation” which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool’s Day, sadly I do not believe it was meant as a joke.

Read morePeter Schiff: Meet ‘LOWFLATION’: Deflation’s Scary Pal

Peter Schiff Destroys The ‘Deflation Is An Ogre’ Myth

Peter Schiff Destroys The “Deflation Is An Ogre” Myth (ZeroHedge, Jan 22, 2014):

Submitted by Peter Schiff via Euro Pacific Capital,

Dedicated readers of The Wall Street Journal have recently been offered many dire warnings about a clear and present danger that is stalking the global economy. They are not referring to a possible looming stock or real estate bubble (which you can find more on in my latest newsletter). Nor are they talking about other usual suspects such as global warming, peak oil, the Arab Spring, sovereign defaults, the breakup of the euro, Miley Cyrus, a nuclear Iran, or Obamacare. Instead they are warning about the horror that could result from falling prices, otherwise known as deflation. Get the kids into the basement Mom… they just marked down Cheerios!

Read morePeter Schiff Destroys The ‘Deflation Is An Ogre’ Myth

Nobel Winner Dares To Go There: ‘No Reason To Fear Deflation … Greece May Benefit From Gold Standard’

Nobel Winner Dares To Go There: “No Reason To Fear Deflation… Greece May Benefit From Gold Standard” (ZeroHedge, Nov 16, 2013):

“Historically, there is no reason to fear deflation,” Nobel Laureate Thomas Sargent explains to Germany’s Wiwo.de, “we all benefit from lower prices.” Crucially, he continues, “countries with declining prices, such as Greece, must improve the competitiveness they have lost in recent years,” requiring falling wages and rising productivity (and falling unit labor costs) which will lead to companies cutting prices, “this is not a dangerous deflation, but part of the necessary correction so that these countries are internationally competitive again.” That central banks pursue an inflation rate of around 2%, Sargent blasts, is because they consider it their job to “make bad debt good debt,” adding that inflation is “a major redistribution machine – reducing the real debt burden for the benefit of creditors and devaluing the assets of the creditors.” A return to a gold standard,he concludes, to prevent governments and central banks from limitless money-printing “would not be foolish.”

Thomas Sargent (via Wiwo.de) dares to go there (and is likely about to be stripped of his Nobel)…

Read moreNobel Winner Dares To Go There: ‘No Reason To Fear Deflation … Greece May Benefit From Gold Standard’

Will It Be Inflation Or Deflation? The Answer May Surprise You

Will It Be Inflation Or Deflation? The Answer May Surprise You (Economic Collapse, May 22, 2013):

Is the coming financial collapse going to be inflationary or deflationary?  Are we headed for rampant inflation or crippling deflation?  This is a subject that is hotly debated by economists all over the country.  Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation.  Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts.  So what is the truth?  Well, for the reasons listed below, I believe that we will see both.  The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis.  This will happen so quickly that many will get “financial whiplash” as they try to figure out what to do with their money.  We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.So why will we see deflation first?  The following are some of the major deflationary forces that are affecting our economy right now…

Read moreWill It Be Inflation Or Deflation? The Answer May Surprise You

Ron Paul On Bitcoin: ‘If I Can’t Put It In My Pocket, I Have Reservations’

Ron Paul On Bitcoin: “If I Can’t Put It In My Pocket, I Have Reservations” (ZeroHedge, April 23, 2013):

“You will not see economic growth until you liquidate the debt and liquidate the malinvestment out there,” is the hard truth that former Congressman Ron Paul lays on Bloomberg TV in this wide-ranging interview. Paul is concerned at “the erraticness of the dollar… and its devaluation,” explaining that, “people think the gold price up and down is a reflection of something wrong with gold; no, I say it is something wrong with the dollar.” The topic gravitates to inflation, which Paul explains is far from missing as, “Bond prices go up. Stocks are going up. Housing prices are starting to go back up again. Education costs are going up,” adding that, “CPI is not reliable.” Paul is buying gold, believes “we are in as much trouble as Greece,” and while fascinated by the free market nature of Bitcoin, he notes that while he doesn’t fully understand it, “if I can’t put it in my pocket, I have some reservations about that.”

Paul on whether he’s concerned about the drop in gold:

Read moreRon Paul On Bitcoin: ‘If I Can’t Put It In My Pocket, I Have Reservations’