In the clearest signal yet that we are still in a potentially devastating global deflationary spiral, The Riksbank, Sweden’s central bank and the world’s oldest central bank, has effectively cut interest rates to minus 0.25% and has started a program of quantitative easing a.k.a printing money. These are the most dramatic moves yet by a [...]

This post is from Niels Jensen of Absolute Return Partners.  I have featured his monthly newsletter a number of times on Credit Writedowns (here’s the link to the last one, hilarious title).  Jensen is very good.
Visit www.arpllp.com to learn more about Absolute Return Partners and to sign up to receive their free monthly newsletter by [...]

Of late, there have been a lot of worries about he potential for inflation in the U.S.  Marc Faber is the most noted pundit in this regard. Over-the-top comments he made back in May about hyperinflation in the U.S. may have been a catalyst for all of the inflation talk. See my post Marc Faber: [...]

The real worry right now should be deflation, as we have not yet beaten back all of the ill deflationary effects of the financial crisis.  Nevertheless, a growing number of market participants see inflation as a longer term worry.  With unemployment high, a cost-wage push will not be part of that equation.  Nevertheless, increases in [...]

Nearly a month ago, back on May 5th, I highlighted some testimony by Federal Reserve Chairman Ben Bernanke before congress in a post labelled, “Bernanke expects recovery later this year“.  In his testimony, Bernanke used the phrase ‘Scylla and Charybdis’ to describe the Federal Reserve’s policy challenge regarding deflationary and inflationary forces.  I would like [...]

So we can put a check by Paul Kasriel’s name for inflationistas because he has come out today with a report saying he believes it is inflation over the medium term which is the greatest risk to the economy.
I will not keep you in suspense. I believe that the greater risk for the global economy [...]

For the time being, I am more worried abut the potential inflationary effects of quantitative easing than about the deflationary impact of deleveraging.  But, the latest news from Ireland shows us that deflation is alive and well. This comes via the Irish Independent:
Consumer prices recorded a second annual drop in April as the cost of [...]

An increasing number of countries are recording negative year-on-year inflation numbers. I reported first on Spain, then on Switzerland.  Add the U.K. to the list as well.
Deflation returned to Britain for the first time in nearly five decades last month as prices measured by the retail price index (RPI) were lower than the [...]

This is a re-post that I hope serves as a reminder that although we are NOT talking about a liquidity crisis in the financial sector, but rather a solvency crisis, liquidity remains very much a concern. This post, despite being 6 months old, should highlight this issue in terms that are equally true today.
The original [...]

First Spain, now Switzerland:
Consumer prices in March were down 0.4% from a year ago, the Federal Statistics Office said, a 50-year low.
The country has been close to deflation all year, with inflation having fallen from a peak of 3.1% in July 2008. The rate was 0.2% in February.
The Swiss National Bank predicts that inflation will [...]