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Topic: Deflationary spiral

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Despite government and IMF opposition Bank of Japan lifts interest rates The “zero rate” regime was introduced in February 1999, in the aftermath of the Asian economic crisis, and amid fears of a deepening recession and a deflationary spiral. Hayami's assessment that the time for the emergency policy has passed is shared by economic analysts, who see the decision as a sign that debt-ridden companies and banks will finally undergo “restructuring” and that the policy of bailing out so-called economic “zombies” may be coming to an end. In a bid to soften the blow of the interest rate increase, the Mori government has announced plans for a supplementary autumn budget to include a new spending package aimed at preventing the economy from falling back into recession. www.wsws.org /articles/2000/aug2000/japn-a22.shtml

Golden Pot Archives Deflation looming, signalled by the 30 year bonds.If and when 4.6% breaks we will be moving into a runaway deflationary spiral of global proportions when credit is drying up and people scrambling for safety. The ASX price of the PMG is intended to track closely the international over-the-counter market spot price of gold and will be based on the market value of the gold backing a PMG at the time of purchase. In "The Federal Reserve's Worst Nightmare," Freemarket Gold & Money Report (Number 272, October 16, 2000), James Turk described this development as "pointing a dagger at the heart of the Dollar bubble," particularly should other oil-producing countries move in the same direction. www.sharelynx.com /gp/goldenpot-abe.php   (19241 words)

"base rates heading below 6% ........" The current economic circumstances (and in particular the almost complete absence of inflationary pressure) imply that in the short term the MPC will be cutting rates well into 1999 (perhaps down to 5% or lower) in an attempt to stave off a damaging deflationary spiral in the economy. The MPC cut base rates to 6% at their January meeting. A sharp but short-lived recession could see nominal interest rates fall close to 4% by the end of the year. dspace.dial.pipex.com /town/parade/rcb48/chartroom/ukdata8.htm   (19241 words)

Deflation (economics) article - Deflation (economics) economics Inflation disinflation wages goods services Effects - What-Means.com In modern credit based economies a deflationary spiral is caused by the popping of a bubble, either in equities, or the collapse of a command economy which had run at a higher level of production than it could actually support. In modern economies, deflation is caused by a collapse in demand, and is associated with recession and long term economic depressions. In modern economies, as loan terms have grown in length and financing is intergral to building and general business, the penalties associated with deflation have grown larger. www.what-means.com /encyclopedia/Deflation_(economics)   (19241 words)

PIMCO Bonds - FF December 2004 Rather, he’s concerned that the more the world monetary architects follow your plan, the greater is the risk of global bubbles in asset prices, both financial assets and property, which when they burst, will send the world into a deflationary death spiral. But your point is the essential point, Morgan: equity and justice demand that reformers always have in the back of their minds that Social Security is a welfare program, and welfare is moral only when it is means-tested. I really do believe, Morgan, in the notion that all men and women are created equal, and in the democratic concept of one person, one vote. www.pimco.com /LeftNav/Late+Breaking+Commentary/FF/2004/FF_December_2004.htm   (19241 words)

J-List side blog Over the past half decade or so, Japan has experienced a deflationary spiral, with the prices for several everyday items actually falling. Japanese usually eat their most famous food mawari-zushi style, with plates of sushi moving along a conveyor belt, allowing you to take whatever you feel like eating as it glides by. Tabi are the famous Japanese shoes worn by ninja, and there are indoor varieties too, used for weddings or other ceremonial events. www.peterpayne.net   (6987 words)

About Face on the Market by Don Luskin -- Capitalism Magazine If the gold market is right, and the Fed's rate-cutting campaign is enough to create enough liquidity to end the deflationary spiral, then there are lots of interesting consequences for stock investors. We should still expect all the normal ups and downs from the stock markets, and not kid ourselves about the need for them to digest the huge moves they've made in the last six weeks. Summary: Don's changing his mind that we're only in a bear market rally, and it's not just because of yesterday's big move. www.capmag.com /article.asp?ID=868   (1260 words)

Money File$: Special Japan Japan is locked in the most serious debt and deflationary spiral to hit an industrialised country since the global slump of the 1930s. Japan’s economy was hit hard by drops in investment and exports in 2000 and by the global economic downturn the last year, which saw profits take a plunge. Japan four largest banks have been exploiting an accounting loophole to inflate their revenues in an attempt to distract attention from the fragile state of their core lending businesses, according to Standard and Poor's, the US credit rating agency. www.moneyfiles.org /japan.html   (7325 words)

Fear of a Quagmire? By 1995 or so the economy had slid into a liquidity trap; by the late 1990's it had entered into a deflationary spiral. And when an economy is in a liquidity trap, the authorities can't offset the depressing effects of deflation by cutting interest rates. As the I.M.F. report explains, the most important reason to fear deflation is that it can push an economy into a liquidity trap, or deepen the distress of an economy already caught in the trap. www.commondreams.org /views03/0524-06.htm   (1645 words)

The One-Eyed King Greenspan's ultimate dilemma--his essential governing failure--was that he didn't know how to handle "success." He had pushed too far in one direction, hardening money's value year after year, but he couldn't push price levels any lower without igniting a destructive deflationary spiral. Greenspan, meanwhile, is once again targeting the real economy, raising interest rates to gain some leverage but also flirting with a recession of his own making. Greenspan initially took dramatic action to avoid the same fate Japan suffered after its financial bubble collapsed in 1990--a low-grade depression and a decade of sputtering stagnation. www.thenation.com /docprint.mhtml?i=20050919&s=greider   (3652 words)

EIR Interview with former Bank of Japan directory Akira Nambara Again, the "Washington Consensus": although the BOJ recognized the situation, and immediately purchased CPs [commercial paper] to avoid a deflationary spiral. Hayami seem too committed to the idea that all the NPLs must be disposed of immediately. But they should watch out because, as BOJ Governor Masaru Hayami mentioned in his New Year's interview, from the standpoint of economic fundamentals—and as Mr. www.larouchepub.com /other/interviews/2002/2902_aki_nambara.html   (1419 words)

TIME.com: Is There A Recession In Japan's Near Future? -- Page 1 That's just the worst of many problems: stocks are trading at their lowest levels since the 1980s bubble economy popped; industrial production declined more than 11% in January; banks are sitting on mountains of bad debt; flaccid consumer spending has left the country in a deflationary spiral. Miyazawa was talking specifically about Japan's budget deficit, expected to reach $5.57 trillion at the end of March, nearly 130% of GDP, the highest proportion in the developed world. Japan's Finance Minister, KIICHI MIYAZAWA, is regarded as the island of calm in the chaotic sea that passes for Japan's government. www.time.com /time/nation/article/0,8599,102050,00.html   (415 words)

Japan Policy & Politics: Hayami denies plan to set up deflation-fighting team Bank of Japan (BOJ) Governor Masaru Hayami on Wednesday denied the government and the Bank of Japan will set up a joint team to compile a comprehensive policy to prevent the economy from falling into a deflationary spiral. Hayami said panel members confirmed the importance for those concerned to maximize efforts to fight deflation. Hayami said the timing of the announcement was good as it came when bank stocks ''have fallen too far.'' www.findarticles.com /p/articles/mi_m0XPQ/is_2001_Nov_26/ai_81828193   (415 words)

USATODAY.com - Bank of Japan leadership changing Bank of Japan Gov. Masaru Hayami leaves office widely resented for not doing enough to rescue Japan's sinking economy from a deflationary spiral. Hayami could never quite shake a central banker's characteristic fear and loathing of inflation, even though he presided at a time when Japan was beset with the opposite problem, deflation. When Koizumi went looking for Hayami's successor, he vowed to land a deflation fighter, presumably someone dedicated to inflation targets. www.usatoday.com /money/world/2003-03-18-japan_x.htm   (415 words)

CHINA/TAIWAN ECONOMY The country is in the grip of a deflationary spiral due to a glut of goods and reluctant consumers. Xie says the ongoing deterioration of the Chinese economy is a concern for Taiwan-based financiers, who cut their investments in mainland China by more than 30-percent in the first six-months of the year. As Amy Bickers reports from Hong Kong, Taiwan's role as a financial lifeline for China could result in economic fall-out from the political conflict. www.globalsecurity.org /wmd/library/news/taiwan/1999/990811-taiwan1.htm   (573 words)

Monetarism Critics of this viewpoint became louder as Japan slid into a sustained deflationary spiral, and the collapse of the Savings and Loan system in the United States pointed to larger structural changes in the economy. The result was a significant disillusionment with Keynesian demand management: a Democratic President James Earl Carter appointed a monetarist Federal Reserve chief Paul Volker who made inflation fighting his primary objective, and restricted M1 to tame inflation in the economy. In his words "We have the keys to the printing press, and we are not afraid to use them." His colleague, Paul Krugman has advanced the counter argument that this would have a corresponding devaluationary effect, as the sustained low interest rates of 2001-2004 produced against world currencies. www.worldwidewebfind.com /encyclopedia/en/wikipedia/m/mo/monetarism.html   (573 words)

CNN.com - Worst case scenario - March 26, 2001 Last week government officials finally admitted what everyone else has known for a long time: Japan is in a deflationary spiral. CNN.com - Worst case scenario - March 26, 2001 Companies aren't investing, so they don't expand, so unemployment rises, so people put off spending, so prices decline, so people save their money because they figure things will cost less in three months or a year than they do now. www.cnn.com /ALLPOLITICS/time/2001/03/26/scenario.html   (573 words)

An Outsourcing Finger Exercise: Archive Entry From Brad DeLong's Webjournal Or maybe some "unforseen" shocks,- say, an implosion in Iraq, an oil price shock, spreading recession in the EU and a dollar crisis due to the East Asians going off their dollar peg-, could set off a deflationary spiral and stagnation. So they have to miss the fun twice, once because they aren't in the game - don't produce goods or services (that anyone other than stock holders consumer), so can't find their pay cut by trade - once during the contest over redistribution. Well, since their function seems to be to arrange the political system so that they benefit in fair weather and in foul, maybe they won't get a turn. www.j-bradford-delong.net /movable_type/2004_archives/000583.html   (9890 words)

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