Browsing Tag

deflation

Ten predictions for 2008

Edward Harrison Jul 28, 2008

With 2008 now half over, it's obvious that the global economy has lurched to the downside. While many have remained unrealistically optimistic about the workout of the present credit crisis, downside risks have been the determining factors…

Monetary System

The inflation-deflation debate

Edward Harrison Jul 21, 2008

My last two posts may leave the impression that I believe inflation to be the greatest concern facing the global economy. I certainly believe it is a problem but not the primary one. Deflation is the looming concern and much more…

Economy

ECB hikes key rate to 4.25%

Edward Harrison Jul 3, 2008

So after much posturing about inflation and what to do about it, the Fed backed down, and the ECB stepped up to the plate. What the effect on currencies and the bond market will be is anyone's guess. But, given the Fed's rhetoric does not…

Monetary System

WIll the ECB incite the Armageddon scenario?

Edward Harrison Jul 3, 2008

Update 4 Jul 2008: see a fuller answer to this question at my new post: The ECB is right and the Fed is wrongThat's the question Ambrose Evans-Pritchard addressed in his blog yesterday. I am firmly in the deflationist camp, meaning…

Monetary System

Inflation or deflation?

Edward Harrison Jun 30, 2008

I am firmly in the deflation camp. I worry about inflation over the short-term, but I still think the long-term threat to the global economy is deflation because asset price deflation will usher in deflationary forces. Nevertheless, there…

Monetary System

BIS warns of worsening credit crisis and deflation

Edward Harrison Jun 30, 2008

Ambrose Evans-Pritchard writes in today's Telegraph of the BIS annual report, which is unusually cautious about the global economy. His article makes for sobering reading.Bill White, the departing chief economist at the BIS, in writing his…

Markets

Bernanke is responsible for the market meltdown

Edward Harrison Jun 27, 2008

The Fed has lost all credibility in the markets. On Wednesday, Ben Bernanke was unable to put his money where his mouth is. Earlier, he jawboned on inflation, trying to match the BoE and the ECB in rhetoric, but his actions speak louder…

Economy

Renewed flooding in midwest will drive up prices

Edward Harrison Jun 22, 2008

Last Monday, I warned of the ill effects that flooding would have on our pocketbooks in the post Floods increase the chances of inflation. Unfortunately, we have seen renewed flooding in the Midwest this week as well. The total impact…

Monetary System

Deflation has already arrived

Edward Harrison Jun 21, 2008

For those of you who have been reading my blog for some time, you'll know that I believe deflation is the longer term threat to the global economy despite the temporary inflationary pressures. However, I did believe that the Federal…

Monetary System

Could central banks cause a crash?

Edward Harrison Jun 18, 2008

That's the question RBS is asking. In recent research, Bob Janjuah, the bank's credit strategist, advises clients to move to safety in anticipation of potential market volatility. The crux of the matter is inflation and central bank…

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