Re: Europe moves nearer Japan-style deflation trap, by Ambrose Evans-Pritchard
What a bunch of nonsense! If Japan had not initiated its famous bubble in the first place, it would not have to fear deflation and it would not still be experiencing zero growth from it incessant money printing to combat the bursting of the bubble. In any event, why does anyone, other than debtors, desire inflation? The world’s biggest debtors are governments, who naturally wish to pay off their debts with debased money. The rest of us want honest money, which means falling not rising prices as productivity and the expansion of trade bring cheaper and cheaper goods to the real economy where we great unwashed must live. Now the ECB will interpret the reduced inflation (note that the EU still experiences some inflation, just not as high as the governments desire) as an excuse to continue to print money. Poor Ambrose…will he ever get it right? I doubt it.