Video on Deflation

Deflation could be the big issue of 2009. Certainly US and UK monetary authorities are trying their hardest to avoid deflation becoming set in.
There are very good economic reasons to avoid deflation. Though, with the US increasing the monetary base so much and with high levels of public sector debt – they will need to be careful, quantatitive easing doesn’t spill over into high inflation – possibly even hyperinflation.

(I meant to say at the end of 2008, not end of 2009 – at start of video)

Inflation vs Deflation

What is more likely inflation or deflation?

Deflation and Monetary Policy

By on December 23rd, 2008

One thought on “Video on Deflation

  1. I’m not sure about the maths behind all this, but I definitely think the outcomes are not symmetric.

    i.e. We won’t get 1% deflation or 1% inflation on a 12-month view. We’ll get 1% deflation or 3-4% inflation.

    A difficult environment for undiversified investors…

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