There is no sound empirical evidence and no convincing theoretical justification for why deflation is such a danger to the economy. Although deflation can be the result of an economic crisis, it can also be caused by cost reductions due…
There is no sound empirical evidence and no convincing theoretical justification for why deflation is such a danger to the economy. Although deflation can be the result of an economic crisis, it can also be caused by cost reductions due…
There have been different stages of varying levels of inflation in world economic history, but also long periods of price stability. The present period, which is characterised by relatively moderate and constant inflation rates of about 2% p.a., is relatively…
The concept that very low rates of inflation are dangerous is closely related to the belief that there is some sort of an “optimum rate of inflation” for the economy, at which economic growth can progress at its smoothest. This…
For months now, we have been showered in a flood of press reports and comments by economists, warning us about the catastrophic effects of potential deflation. However, they never justify their statements to any great extent. As a rule, the…
The real price of aluminium is moving in a long-term downward trend. This will not change because of large over-capacities for production in China. The recent pickup in prices only seems to be a “dead cat bounce”. Source of…
Despite all efforts to reduce the dependency on fossil fuels, crude oil is still the most used commodity with a daily consumption of approximately 90 million barrels per day. The EIA expects demand to grow to 97 million barrels per…
Contrary to popular belief, gold was not a good store of value in the last century. Adjusted for inflation, the gold price behaved very cyclical. Since the 1920ies it showed a reverse pattern of economic sentiment. During periods of improving…
Economic forecasts are not complete nonsense or impossible per se. Indeed, it is the way they are usually drawn up these days that can give rise to substantial problems. The quality of the underlying data is often poor. Or it…
a) “Paint a picture to suit yourself …” Not only poor data quality influences the quality of a forecast, but also the deliberate selectivity and manipulation of the data used to draw up a forecast. Although economists and analysts work…
a) “Garbage in, garbage out” If predictions are drawn up on the basis of data analyses, the quality of the underlying data is crucial. The most sophisticated forecast model is absolutely no good if the quality of the information entered…
