Deflation’s Here, and the Downward Spiral Has Started
By Frank Ryan
September 18, 2012
Denmark, Germany, Switzerland, and Finland have been issuing short term government notes at negative interest rates since mid-year 2012!
This dangerous precedent has happened before. Most recently, Japan experienced negative interest rates in the 1990s. The effects of the economic quandary in Japan and the efforts to restore growth were so misguided that the Japanese are still attempting a recovery. In almost twenty years, Japan has yet to make a full economic recovery.
The United States and the European Union are next and are headed into the same disaster as Japan unless decisive action is taken now.
Alan Greenspan clearly understood the growing dangers in the economic world in his book, The Age of Turbulence, in which he explains the continuing saga of an increasingly turbulent world economy.
Deflation is characterized by falling prices, falling incomes, declining value of real estate, and an inability to fund government debt and unfunded obligations.
Deflation has begun, and governments continue to push the “cliff” date as far into the future as possible when only quantitative easing is considered by the Federal Reserve and more government spending is considered by the White House.
Unfortunately, current fiscal and monetary policies of most Western nations are merely moving us farther up the fiscal cliff rather than away from it.