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Breakingviews: Deflated expectations

Friday, May 24, 2013 - 02:31

May 24 - Breakingviews columnists discuss the implications of inflation being in decline globally despite seemingly inflationary central bank policies.

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Went all the central banks of the world's other buying bombs a lot of people thought. This is gonna create inflation now once we've seen in fact for the last year old boy is what we go disinflation decreasing inflation. I even go to reserve report today this from Canada saying deflation a man and placing candles -- well below the central bank's target of 13%. Why is this happening -- it means and. With it does look a lot of you factors going into this one is why prices coming down right there are -- -- -- in China so I mean. I think for me to the issue is that it's a global phenomenon it's not just happening and one -- two countries very mini US refinancing. In the indicated -- -- traditionally watched as well below their 2% target at this point. You know again they seemed very comfortable -- inflation expectations are still anchored -- To me it's a bit of a warning signs like that as you said we've been doing all of these bond -- Extraordinary inflation which is supposed to be inflationary and -- we're not -- nicely -- even wanted to be pleased as arresting those precautions about how yeah how I count that but yeah I think I think I mean again particularly in the developed world when you have so much debt the little inflation is what is a lot better and you distance. Clinton and it. Because there's a question of this excellent everybody talks about an exit -- it -- so much just lately but it. Always central bank's board -- assets and at some point that there is they have to get rid of them will let them -- we'll do something about it. Deflation is. That don't wanna do that. That when I suppose they have and massive amounts of assets on the balance sheet. The -- -- -- around far longer than anyone really expected and obviously the last thing you want to be doing in this kind of that this inflationary environment is. Don't -- related bomb -- to the market. Yes overall I think again you saw a lot of volatility this week about. He is to thank goodness -- intelligence and is it exactly and it really trying to kind of figured out but I think what we're finding as I. There's been a lot of focus in this country on jobs but. It's going to be difficult you know to justify. Sorry to take in whether it's tapering or reversing course we're seeing kind of disinflation. Or not that's gonna be -- and watch. Thanks we'll leave that thinks that's. We'll be watching inflation disinflation and deflation and we'll have more breaking news for you next week.

Breakingviews: Deflated expectations

Friday, May 24, 2013 - 02:31

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