Deflation Watch

Originally published by CNBC on September 2, 2014 Read the original article.

Consumers are more likely to make purchases when they’re optimistic about the future than when they’re pessimistic. In recent times, consumer optimism was at its height during the 1990s bull market. But the rate at which money changes hands (money velocity) in the U.S. economy peaked in 1997, and has since been trending downward. Money [...]

Read More

Originally published by Bloomberg on August 29, 2014 Read the original article.

Prominent political leaders from the eurozone’s two largest economies have recently expressed a lack of confidence in the European Central Bank’s ability to rescue the eurozone from deflation. On Aug. 1, French Prime Minister Manuel Valls told a seminar at the Elysee presidential palace that the ECB is “powerless” to stop eurozone deflation. Now, Germany’s [...]

Read More

Originally published by New York Times on August 23, 2014 Read the original article.

In his Aug. 22 Jackson Hole, Wyo. speech, European Central Bank President Mario Draghi talked about the double-whammy that hit the eurozone: the global financial crisis (2008-2011) and the sovereign debt crisis (2011 – ). He says the one-two punch is the main reason that European Union unemployment remains doggedly persistent. Draghi also said, “Inflation [...]

Read More

Originally published by Dawn.com on August 1, 2014 Read the original article.

French Prime Minister Manuel Valls sees a real risk of deflation for the eurozone. He recently described the European Central Bank’s economic policies as ineffective and said that unemployment “has reached an intolerable level.” Eurozone policies had not delivered economic rewards and there was a real risk of deflation in the face of lower-than-expected growth [...]

Read More

Originally published by Marketwatch on August 1, 2014 Read the original article.

The price performance of Wal-Mart’s stock relative to the S&P 500 may be confirming what chief investment strategist Michael A.Gayed calls a “deflationary pulse.” Here’s an excerpt from Gayed’s August 1, Marketwatch article: Historically, when inflation expectations are falling, what I like to call a “deflation pulse,” risk assets tend to have a difficult time [...]

Read More

Originally published by Bloomberg on July 30, 2014 Read the original article.

In March, a member of the European Central Bank Governing Council said that the “deceleration of prices” in the eurozone would be temporary. But it appears that much of the European Union’s price deflation has become a trend. The ECB’s assessment of price deflation has been shortsighted, according to a July 30 Bloomberg article by [...]

Read More