South China Morning Post (June 27)
“Thanks to Brexit, a new global financial crash is looming. More vulnerable economies risk slipping back into recession and deflation will continue to get the upper hand.”
Tags: Brexit, Deflation, Financial crash, Looming, Recession, Risk, Vulnerable
Washington Post (January 14)
“The China bubble has burst,” but the nation’s trajectory remains unclear. “The worst outcome—a doomsday scenario—would have China fostering worldwide deflation. Its growth would continue to deteriorate sharply, extending the decline in commodity prices and the weakness of global trade. Around the world, there would be more production cuts, layoffs and bankruptcies.”
Tags: Bankruptcies, Bubble, Burst, China, Commodity prices, Deflation, Doomsday, Global trade, Layoffs, Outcome, Production cuts, Unclear, Worst
Bloomberg (September 2)
“If oil prices take another dramatic slide…, who wins and who loses? And could plummeting oil prices sow the seeds of the next recession?” Even in oil consuming nations, lower oil prices “come with a downside. As they work their way through the system, deflation could follow.”
Tags: Deflation, Downside, Oil, Plummeting, Prices
The Economist (August 29)
“After two years of remission, Japan seems likely to sink back into the ‘chronic disease’ of deflation…. New data are expected to show on August 28th that core CPI, the central bank’s preferred indicator of inflation, turned negative in July for the first time since the bank launched a big programme of quantitative easing… in April 2013.” Fortunately, better-than-expected data caught economists by surprise, showing level prices so Japan remains out of inflation, though just barely.
Financial Times (June 4)
“With inflation stuck at zero, and the BoJ’s attempts to fly looking more like Wendy’s than Peter Pan’s, Mr Kuroda has taken every opportunity to reinforce his commitment to future inflation…. In Neverland, whatever Peter Pan wanted, he got. In his determination to end Japan’s deflation, Mr Kuroda may be the same.”
The Economist (February 21)
“Deflation can be a good thing. But today’s version is pernicious.” Prices have fallen in Germany, Italy, Spain, Greece, indeed the euro zone as a whole, and “ultra-low inflation is also widespread. America, Britain and China each have inflation rates of less than 1%.” Should there be another crash, central banks would have little room to act. “The world is grievously underestimating the danger of deflation.”
Tags: Central banks, China, Deflation, Euro zone, Germany, Greece, Italy, Pernicious, Prices, Spain, U.S., UK
Financial Times (January 23)
“It has taken far too long for the European Central Bank to embark on quantitative easing but its belated action is no less welcome.” ECB president Mario Draghi unveiled a massive program to purchase eurozone bonds through 2016 to help counter the threat of deflation. “There is no doubt that Mr Draghi needed to act. Growth and underlying inflation have been relentlessly weak, providing clear evidence that demand in the eurozone is faltering.”
Tags: Bonds, Deflation, ECB, eurozone, Growth, Inflation, Mario Draghi, Quantitative easing
Financial Times (December 19)
Concerns that lower oil prices will spark deflation are misplaced. “While lower oil prices will have a one-off arithmetic effect on the price level and hence reduce inflation, that should boost growth rather than retarding it. Lower oil prices…benefit households almost immediately,” essentially raising real incomes and stimulating demand.
Tags: Concerns, Deflation, Demand, Growth, Households, Inflation, Oil prices, Real incomes
Bloomberg (August 10)
The Bank of Japan has refrained from additional monetary stimulus; an apparent acknowledgement that “pumping more money into the economy won’t end Japan’s deflation. Falling prices are as much about the aging population as anything else, and only structural change can arrest the trend.” Fortunately, the economy might just be driven by “a new breed of Japanese companies going overseas as the domestic market shrinks.”
Tags: Aging population, BOJ, Deflation, Economy, Japan, Market, Monetary stimulus, Overseas, Prices, Structural change
The Economist (August 9)
Abenomics may be working at the top, but it’s not trickling down to “folk who do not own bundles of shares or a flat in Tokyo’s trendy Daikanyama neighbourhood…. The mantra of Mr Abe and his advisers has been that a virtuous circle would come about whereby wages would rise and lift consumer spending, which in turn would boost investment by companies. Bingo: Japan would emerge from deflation. That is not happening and it is a conundrum.”
Tags: Abe, Abenomics, Advisers, Consumer spending, Daikanyama, Deflation, Investment, Japan, Shares, Tokyo, Trickle down, Wages
