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Deflation risk
IEHI Feed: The Hedge Fund Implode-o-Meter — Deflation risk (econbrowser.com) Search Enter your search terms Web HF Submit search form 2008-10-29 "There are plenty of things to worry about in the current economic situation. But deflation isn't one of them." ...

Links 10/30/08
naked capitalism — ... Financial Times 'We're not going to win this war' Asia Times A.I.G. Has Used Billions From the Fed but Hasn’t Said for What New York Times. I am glad someone has taken interest in that question. Mizuho $7 Billion Loss Turned on Toxic Aardvark Made in America Bloomberg. U.S. airfares hit record high Los Angeles Times Investors shun Greek debt as shipping crisis deepens Ambrose Evans-Pritchard, Telegraph Deflation risk Jim Hamilton, Econbrowser Pay Up, Or Else! Independent Accountant ...

links for 2008-10-30
Economist's View — ... Works Projects Promoted at Hearing - NYTimes.com Treasury, FDIC Plan to Rework Millions of Mortgages - Economy Watch Repeating the Fed's Policy Mistake of 1936-1937 - David Beckworth Private Highways - The Bellows Does Nature Break the Second Law of Thermodynamics?  Scientific American Come With Me to the F.O.M.C.: A Sneak Peak Into Fed Life - Economix Deflation risk - Econbrowser Needed: Washington Response to the State and Local ...

The Fed's Desired 'Weaker Dollar'
Manhattan Real Estate: New York City Real Estate Tips — ... opinion is BS! If dollar strength continues at this rate, more harm will be done and its clear the fed will do everything to inflate, and that means trying to debase the dollar or at least stop its sharp upward movements. Deflation is the worst outcome, unfortunately its here already. The fed will take a little bit of inflation later, if it means getting us out of this deflationary spiral in the near future. While housing and credit contract, are prices everywhere going down though? Econbrowser debates whether general deflation is here: ...

the most important chart in the world
Decline and Fall of Western Civilization — ... will rage for some time -- in the latest installment, jim hamilton thinks an extended deflation nearly impossible -- but what is certain is that we have deflation now.

Some False Hope on the Deflation Front
naked capitalism — ... produces substantial reflation. Second, labor is pushing for a reversal of some of the restrictions on collective bargaining implemented over the last 26 years. If workers do secure more rights relative to management and shareholders, that makes deflation far less likely (they will not, for instance, accept a Japan type situation where corporations reap large profits and employees see no pay increases). Third, many economists believe that deflation can be averted. Jim Hamilton gives a typical argument: Some of my colleagues still talk of the possibility ...

Hamilton Scoffs at Deflation and the Liquidity Trap
EconLog: Library of Economics and Liberty — Here 's James Hamilton at his most dismissive: Some of my colleagues still talk of the possibility of a liquidity trap , in which the central bank supposedly has no power even to cause inflation. Their theory is that interest rates fall so low that when the Fed buys more T-bills, it has no effect on interest rates, and the cash the Fed creates with those T-bill purchases just sits idle in banks. To which I say, pshaw! If the U.S. were ever to arrive at such a situation, here's what I'd recommend. First, have the Federal Reserve buy up the entire outstanding debt ...

How to Create Inflation
The Baseline Scenario — ... for how to create some inflation (he suggests a target of 3%). And if that doesn’t work, he has an even more clever plan. ...

Hamilton: The Fed Needs a New Plan
Economist's View — ... What if the policy is unsuccessful, and we still get severe deflation despite the 3% inflation target? In some ways, that's the best outcome of all, since, as I explained previously, in that scenario the Fed has solved the nasty problem of all that debt owed by the Treasury. ...

Deflation Can Happen
Economics and... — I’m not saying it will happen, or even that it’s likely. As a matter of fact, if you offer me less than 6:1 odds, I won’t even consider a bet on deflation, even taking into account its hedge value (since deflation is likely to be associated with bad real outcomes). But what puzzles me is that James Hamilton seems unwilling to take that bet at any odds. This despite the fact that he repeatedly acknowledges the deflation that Japan was still experiencing less than a decade ago. ...