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Deflationary “Forces at Play” in U.S. and Parts of Europe

Originally published by Xinhua News Agency on June 12, 2018 Read the original article.

Anyone who has scanned the financial media in recent months has seen that the Fed is aiming to keep inflation under control. The prospects of deflation has all but disappeared from the central bank’s radar screen.

But, in the view of Elliott Wave International, preparations should be made for deflation, not inflation.

Yes, the economy has recovered since the Great Recession ended in June 2009. But, here in 2018, there are signs of a budding deflationary psychology.

Read how the May Elliott Wave Financial Forecast addressed an April Wall Street Journal subheadline that said “…Worry of a Japan-like Drift Downward in Consumer Prices is Gone”:

As for the reported elimination of the “Drift Downward in Consumer Prices” in the U.S., more recent stories indicate that this claim is exaggerated. On April 25, a Bloomberg article noted that while the current period should be the “long awaited” moment when companies can raise consumer prices, in fact they are actually “losing the power to hike prices.” As shoppers “become less loyal to brand names than ever before,” they’ve also acclimated to “lower food costs.” General Mills’ attempted price hike for their Progresso and Yoplait products illustrates “the forces at play.” The move hurt sales, as it has for other major brands. “There’s no question that the balance of power has shifted,” says a consultant to consumer companies. “It’s not just big food,” reports Bloomberg. Sales of consumer goods ranging from Lysol to Huggies to Kleenex reflect resistance to higher prices. [emphasis added]

Indeed, signs of a deflationary psychology extend beyond the U.S.

Read this article excerpt from China’s Xinhua News Agency (June 12):

Belarus registered deflation in May, the National Statistical Committee of Belarus reported on [June 11].

The Statistical Committee said consumer prices for goods and services in May decreased by 0.3 percent compared with April 2018.

In May, prices for non-food products and prices for food products fell by 0.03 percent and 0.6 percent respectively compared with April. …

As you may know, Belarus is a country in Eastern Europe.

Read this Free Report: “What You Need to Know NOW About Protecting Yourself from Deflation.”

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