On a brief sidenote, in class we discussed inflation and deflation. While we agreed that both were bad, it was discussed that deflation was the worse of the two because no one would spend any money, since prices would be going down every day leading to total economic collapse. On a video from Bloomberg News, panelists discuss the disappointing week I discussed before and whether or not it would lead to deflation. Michael McKee from Bloomberg news says that it isn't deflation, it's disinflation which is the rate of inflation. This completely changes the landscape; deflation is obviously a greater cause for alarm than disinflation, but they both are a cause for concern. The panelists chalk this week up to market over reactions and that they expect Europe to bounce back. While Trish Regan smartly brings up the deflation of crude oil and lowering of energy costs/prices both Michael McKee and Monica Dicenso make it an opportunity for the consumer to turn around the market because they'll have more spending money, in this way firms (excluding energy firms) that aren't affected by exports will also benefit. As Trish Regan remarked, "It's like one big giant tax cut for everyone".
Bloomberg Video
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