Thread: Falling prices.....yay!

Originally Posted by El Kabong

Just gonna set this here.....

Sweden cuts rates below zero as global currency wars spread - Telegraph

Nice one Woti, I like this. This guy is pretty good....


The Riksbank caught markets by surprise, reducing the benchmark lending rate to minus 0.10pc and unveiled its first asset purchases, vowing to take further action at any time to stop the country falling into a deflationary trap. The bank presented the move as precautionary step due to rising risks of a “poorer outcome abroad” and the crisis in Greece

[...]

The move comes as neighbouring Denmark takes ever more drastic steps to stop a flood of money overwhelming its exchange rate peg to the euro and tightening the deflationary noose.

[..]


The Chinese yuan is linked to the US dollar through a “dirty float”. Yet the dollar is rising relentlessly against other Asian currencies as the prospect of monetary tightening by the Federal Reserve lures a flood of capital into the US, a replay of the strains that led to the East Asia crisis in 1998.
This is compounding China’s problems at a delicate time when the economy is already facing a property crunch. The country’s factory gate deflation has deepened to minus 4.3pc.
China’s yuan has jumped 50pc against the yen since early 2012. There are growing fears that China may be forced to drive down the yuan to protect its export base and avert a possible hard-landing. This would transmit a deflationary shock worldwide, given the sheer scale of China’s excess capacity.







Manoj Pradhan, Morgan Stanley’s global economist, said the world is revisiting the “ghosts of the 1930s” as one country after another tries to steal a march on others by getting in devaluation first. “The lesson from the 1930s is that those who do so early benefit at the expense of those who wait too long,” he said.


Yes Miles, hyperinflation is just round the corner. Any day now. Idiot.

U.K. Inflation Slows More Than Forecast to Record-Low: Economy



(Bloomberg) -- Britain’s inflation rate fell more than economists forecast in January, dropping to the lowest on record as food and fuel prices plunged.
Consumer-price growth slowed to 0.3 [annually] from 0.5 percent in December, the least since the data series began in 1989, the Office for National Statistics said on Tuesday. Based on a statistics office model, it’s the weakest since March 1960, when prices fell 0.6 percent. Economists had forecast a 0.4 percent rate in January.
The Bank of England cut its near-term inflation projections last week to reflect the drop in oil prices, and Governor Mark Carney said the rate could fall below zero in the coming months.

U.K. Inflation Slows More Than Forecast to Record-Low: Economy - Bloomberg Business