Unfortunately, Bernanke is out of wind-up toys that can stem our deflationary spiral.
Meanwhile, it risks limiting its ability to battle the deflationary spiral of persistently scarce credit, declining profits and higher unemployment.
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Evidence that Japan is coming out of its deflationary spiral are not merely, nor best, illustrated by the market for land.
The country is on the brink of a vicious deflationary spiral, with falling prices swelling companies' real debts and keeping real interest rates high.
With major economies from the U.S. to Europe trying but failing to print their way out of crisis, Rosenberg sees a deflationary spiral in the works.
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Say what you will about our Fed Chairman, but it is clear that Gentle Ben is bound and determined to keep the U.S. economy out of deflationary spiral.
This is particularly worrisome given the mortgage reset schedule that has just begun, unwinding fiscal stimulus, and the deflationary spiral just kicking off in the euro zone.
Bernanke knew that if the economy did slip back into recession, the country ran the risk of entering a deflationary spiral, which once started, is awfully hard to stop.
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In this environment, therefore, government must borrow and spend the savings generated by the deleveraging in the private sector in order to keep the economy from entering a deflationary spiral.
All of this has newsletters warning of the possibility that a deflationary spiral could wreak havoc on asset prices, including more sharp declines in stocks and even erosion of real estate values.
If Tokyo were to devalue the yen in a bid to boost exports, it might prompt similar moves by other Asian nations and thus drag the world into a potential deflationary spiral.
As if to pre-empt criticism that deficit reductions and cuts in the social safety net would send Europe into a deflationary spiral, the German leader tried to turn the focus away from the Old Continent.
As Adam Posen, a member of the MPC, said this week, the policy has contributed to preventing a deflationary spiral and encouraged an improvement in credit conditions and asset markets over the past six months.
There is good reason to think that treating Brazil's crisis as merely a temporary setback on the road to recovery is to ignore a potentially more ominous Big Picture - that the event represents another loop in a deflationary spiral that could dampen the world's economic prospects for years to come.
"The austerity that Germany wants to impose will push Europe into a deflationary debt spiral, " Mr. Soros warned.
Prices and incomes go down together and once that pattern becomes anticipated, deflationary psychology causes a destructive downward spiral of spending.
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