本帖最后由 jsl 于 2010-5-22 05:20 编辑
Deflationary news stormed my screen these days.
1. China's engineered (or not) cool down
2. EU's debt problem
3. unemployment rate stays high
4. growth gone?
5. second wave of foreclosure?
6. possible rate explosion under mounting deficit pressure. This is a ticking bomb. The current extreme might trigger its opposite.
7. CPI I really don't like the CPI number, a lot of it is about equivalent rent which can be misleading in the current situation.
8. ....
There is one theme fighting all of these : debase the currencies if the central banks are determined. So far the ECB is reluctant to do that even with the hundreds of billions to bailout PIIGS. Aus sees no need yet (they actually brought up the rate). Devaluation of currencies is essentially a forced wealth transfer from lenders to borrowers, like it or not. German doesn't want to help PIIGS this way.
Deflation itself is not scary, the implication of economic contraction is. When deflation expectation sets in, it will further disincentive investment and economic activity. Inflation is harmful only when it is so high that it drains the purchasing power and eventually leads to contraction and deflation (unless the currency goes Zimbabweish). Deflation does not always mean terrible for our everyday life. Examples are Japan in the later part of its lost decade, China in the first few years of this century. Stock markets, however, generally sucked. Of course, deflation.
Yes, the risk of deflation is here, however the possible outcomes rely on monetary policies in a large part. We could alternatively have a stagflation or just a hiccup on the way back to normal, the new norm. The Fed definitely will try to choke any deflation expectation here. If they fails to do so, we all know what will happen. The asset inflation before recession coupled with reckless lending then prompt people outspend their reliable savings and income. Given the size of the problem, it takes time to absorb what has been done, so there is nothing to surprise about some short term deflation after a period of reflation. Were not for the EU crisis, people might be cheering the low CPI for less rate pressure. Now it was interpreted as confirmation of a second dip. Bad timing.
There has been a fight between the investors and the Fed/central banks. By lowering the rate to zero, the Fed was pushing everyone holding cash to take risk and invest. However, the Fed can not control where the money goes. When the money doesn't flow into real economy, low interest rate will cause some unintended consequences. Last time, housing market got attention. This time? I don't know, maybe gold is one, at lest it helped bond market. In a worst case, we get stagflation.
For a long time since the worst of 2008, everybody was in the rescue mode. Only recently, some real investment occur, M&A for example. It was everybody's wish that the turbulence in the financial market won't derail the economy from the right track. It is only a wish. A critical variable is the duration of the impact. A long period of difficulty will stall economic engines.
The bottom line is: deflation is a symptom, not a cause. As long as Americans have money to spend, I will continue to be optimistic about the future. On the other hand, traders should always sniff the fear and greed in the air, investors should always know how to control risk. |
狗仔卡
发表于 2010-5-22 03:03 AM
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变色卡
发表于 2010-5-22 05:09 AM
两位别争了。Inflation/Deflation是描述经济状况的， inflationary是描述货币政策的。所谓Inflationary deflation，是描述的这样一种局面，因为经济的deflation，或者经济发展出现了deflation risk，所以央行采用inflationary的货币政策。不存在任何矛盾。
