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Email this2:25 am
October 21, 2013
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This may be very temporary as price of oil has been extremely low and will go up again.
Much depends too on whether people will start spending again once the crisis stabilizes and things are open again. But that depends on disposable income too.
Some prices are being artificially suppressed right now. e.g. car insurance and electricity in Ontario at least.
6:15 am
March 30, 2017
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Inflation will only pick up if economy picks up and outlook is rosy again. When that happens, central banks can crush inflation by raising interest rate aggressively. Now the question is higher interest rate will be a huge burden for government's worldwide snapping on trillions in debt to fight covid effect. So it will be interesting how that scenario pans out if it happens.
But one should still prefer inflation over stagflation or deflation any day, especially deflation which no monetary policy can cure...
8:51 am
September 11, 2013
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Lots of global examples of inflation & hyperinflation being caused by gov't money printing during bad times. You do not need an economy with a rosy outlook to have inflation or hyperinflation.
8:08 am
March 30, 2017
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Bill said
Lots of global examples of inflation & hyperinflation being caused by gov't money printing during bad times. You do not need an economy with a rosy outlook to have inflation or hyperinflation.
those are "second tier" countries economy wise. I wont lump US, Canada, UK, Japan etc into that category.
9:42 am
September 11, 2013
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savemoresaveoften, very true, but maybe some of those 2nd tier countries were once 1st tier. Germany between the wars is an example, also Israel in the 1980s, Venezuela world's 4th wealthiest nation per capita in 1950. Because you're top dog today is not a guarantee forever.
8:24 pm
August 9, 2014
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Bill, is all about the market's confident in a government. This is the reason why people still trust the Yen after 25 + years of QE conducted by Bank of Japan, while the plethora of South and Central America governments cannot print any amount of money without facing run away inflation.
As long as people still have confident in a currency, all the newly printed money would not likely to speed up the velocity of money (the speed in which money change hand) in an economic system (which ultimately determine inflation), as people are not spending the newly printed money ASAP, and instead, keep it around.
6:45 am
September 11, 2013
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Jon, 100% agree, as long as people think your money's worth something you're gold, all the other monetary factors don't mean much as long as there's confidence. Trouble is, like bankruptcy, that day comes suddenly - a week ago you weren't bankrupt but today a major lender pulled the plug so the game's suddenly over, "ridin' high in April, shot down in May". For the south and central American countries that day is behind them, for Japan, etc unless things change it's up ahead but the party goes on pretty much full-steam until that very day.
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