|
Mounting deflationary risks are an important case in point. In my view, the risks of global deflation are higher today than at any point in the past 70 years. Japanese deflation is unmistakable, and America’s GDP-based inflation rate of 1% hasn’t been this low in 48 years. The risks to Europe’s 2% inflation rate are decidedly on the downside, especially given pro- cyclical fiscal and monetary policies that are now bearing down on a weakened Euroland economy. Moreover, with the exception of Korea, the rest of Asia is already in deflation; that’s true of Hong Kong, Singapore, Taiwan and, of course, China
. . .
China’s export-led growth dynamic now has increasingly important deflationary implications for the broader global economy. Nor am I alone in reaching this conclusion. As I travel the world, I find a growing consensus in policy and investor circles endorsing China’s role as an agent of global deflation.
. . .
this increasingly fragile global climate
. . .
a weaker US dollar -- the world’s most important relative price -- will ultimately play a key role in sparking any such rebalancing.
. . .
this lopsided world economy. Yet left to its own devices, the endgame would find a world dominated by the American consumer and the Chinese producer. That’s hardly a stable alternative. Global rebalancing is only way out.
1:54:12 PM Google It! 
|
