Deflation vs. Inflation by Shane Obata and Triggers, Tha Business
Some people are expecting deflation…
…Others are expecting inflation.
So who’s right?
Not Steve Liesman All of them.
Deflation
Investopedia defines deflation as “a general decline in prices, often caused by a reduction in the supply of money or credit.”
While that’s not occurring everywhere, it is taking place in parts of the world.
Credit growth in Europe
The global economy is dependent on credit; if it doesn’t grow then neither will economic output.
Chart 1 shows that, in Europe, loans to private sector have been trending down since mid-late 2011 and are now negative.
Chart 1:
