You always include so much current, hard, factual data in your Substack that it makes the main-stream media look pathetic. I like to speculate and extrapolate (it’s a sickness, I know). So, even though I realize that this would be uncharted territory, I’d love to hear your opinion:
If China goes into a long deflationary period, would that…
You always include so much current, hard, factual data in your Substack that it makes the main-stream media look pathetic. I like to speculate and extrapolate (it’s a sickness, I know). So, even though I realize that this would be uncharted territory, I’d love to hear your opinion:
If China goes into a long deflationary period, would that increase the likelihood of the U.S. economy also becoming deflationary? If so, how quickly would it likely occur, and would the severity also be increased? Or maybe China collapsing would be to our economic advantage in some ways (market share, brain drain to the US, stimulus for us to innovate, etc.). During the Great Depression, when our economy tanked, so did much of the rest of the world’s. But that era had some different financial fundamentals, and so I have no idea how things would play out now. Would one major country’s deflation lead to other countries going into deflation?
My suspicion is that the global economy as a whole is already sliding into a deflationary period that could prove to be distressingly long. I do not believe it is an "if" or even a "when", but rather a "now".
For obvious reasons, I will not be disappointed to be proven wrong by subsequent events!
Both during the Great Depression of the 1930s and the Long Depression of the 1870s, deflationary impulses were transmitted globally. As we saw with the serial liquidity crises during the Great Financial Crisis of 2007-2009, contagion is a real phenomenon. I believe current global conditions reflect a contagion effect by which deflation is being transmitted once again globally , even though we have not had a seismic event (yet) in financial markets to put a marker on the beginning of the contraction.
You always include so much current, hard, factual data in your Substack that it makes the main-stream media look pathetic. I like to speculate and extrapolate (it’s a sickness, I know). So, even though I realize that this would be uncharted territory, I’d love to hear your opinion:
If China goes into a long deflationary period, would that increase the likelihood of the U.S. economy also becoming deflationary? If so, how quickly would it likely occur, and would the severity also be increased? Or maybe China collapsing would be to our economic advantage in some ways (market share, brain drain to the US, stimulus for us to innovate, etc.). During the Great Depression, when our economy tanked, so did much of the rest of the world’s. But that era had some different financial fundamentals, and so I have no idea how things would play out now. Would one major country’s deflation lead to other countries going into deflation?
My suspicion is that the global economy as a whole is already sliding into a deflationary period that could prove to be distressingly long. I do not believe it is an "if" or even a "when", but rather a "now".
For obvious reasons, I will not be disappointed to be proven wrong by subsequent events!
Both during the Great Depression of the 1930s and the Long Depression of the 1870s, deflationary impulses were transmitted globally. As we saw with the serial liquidity crises during the Great Financial Crisis of 2007-2009, contagion is a real phenomenon. I believe current global conditions reflect a contagion effect by which deflation is being transmitted once again globally , even though we have not had a seismic event (yet) in financial markets to put a marker on the beginning of the contraction.
“Now” = wow. I literally got a chill down my back!