Wednesday, October 29, 2014

Faithful readers will remember that................

.............your faithful blogger has traditionally been more concerned with the prospect of deflation than the prospect of inflation.  Since most all his assets are in encumbered real estate, surely you won't blame him.
     The Economist has been noticing the dangers of deflation as well.  This weeks magazine features this article on the subject; it begins like this:

It is a pernicious threat, all the more so because, at its onset, it seems almost benign.  After two generations of fighting against inflation, why be worried if the victory looks just a bit too complete, if the ancient enemy is so cowed as to no longer strain against the chains in which it is bound?  But the stable low inflation fought for in the 1980's and 1990's and inflation hazardously close to zero are not so far apart.  And as inflation drops, slipping into deflation becomes ever easier.  It is in that dangerous position that the world now stands.

No comments:

Post a Comment