Skip to comments.You Should Read Paul Krugman On The Emerging-Market Turmoil
Posted on 02/02/2014 11:45:54 AM PST by blam
You Should Read Paul Krugman On The Emerging-Market Turmoil
Febuarary 2, 2014
Paul Krugman weighed in this week on the turmoil in emerging markets.
He connected the turmoil to weak economic performance in developed markets, and the mad rush by investors to seek return anywhere they can get it. What we're seeing now is the downside of that basically the argument is that Turkey (et al) are like subprime, and that they represented a search for returns in an economic environment that was very poor. Now that's blowing up.
(Excerpt) Read more at businessinsider.com ...
Paul Krugman? No.
The inflation psychology has been managed through some price manipulation but mainly the decline in purchasing power aside from the mostly useless gadgetry we pick up at cheaper prices. The monthly data plans and credit payments consume the rest of disposable income.
We export a lot of inflation to countries like China who want to build up their industry (and military). Sooner or later they will draw the line and demand actual payment, not IOUs and that is when inflation will ht here all at once.
Why would anyone read the ravings of an idiot.
Deflation is a benefit to the consumer if it is a result of markets -- it means the currency's purchasing power is increasing.
Deflation is only dangerous when it results from government-sponsored central banks yanking the rug [or hinting at yanking the rug] out from under the easy-credit they created in the first place.
Krugman, in his Keynesian-drenched delirium, is incapable of understanding the difference.