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Deflation figures prominently in Weiss' long-term bearishness.
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Amid dire Eurozone economic figures — deflation, recession and stagnant unemployment — and the European Central Bank's announcement this week to introduce quantitative easing measures to stimulate the economy, many Davos participants are weighing in on the global impact of these statistics.
By the central bank's reckoning, official figures understate deflation by up to one percentage point, which suggests that Japan is suffering a persistent consumer-price deflation of perhaps 1-2%.These price falls lead some economists, such as Jeffrey Young of Nikko Salomon Smith Barney, to wonder whether the economy really is any healthier, despite recent gains in real GDP.
Asda and its rivals are fighting back with price cuts, but Clarke cannot see any letup in the pressure: "Next year is going to be a year of continued deflation and challenging [sales figures for the industry] … The customer is going to continue to have value from pricing investments placed by many retailers".
In China dreadful figures on deflation, transport, electricity output, exports and imports flatly contradict the government's claims of "nearly 8%" real growth last year.
Supermarkets in the UK are engaged in a bitter price war that has pushed the grocery market into deflation, according to October figures from market research firm Kantar Worldpanel.
On the positive side, the UK avoided falling into deflation with the latest CPI figures showing zero for the second month in a row.
The recent market fluctuations reflect the loss of bearings by investors trying to figure out what deflation really means.
The relationship between magma chamber deflation and magma discharge processes (Figure 4) has also been investigated in the 2011 basaltic eruption of Grímsvötn Volcano by Hreinsdóttir et al. ([2014]) on the basis of crustal deformation and cloud height measurements.
A geometric representation of part of the algorithm and the insight of deflation can be seen in Figure 2. Non-linear relationships between variables may be found by embedding this data into a kernel induced feature space.
A breakdown of the figures also showed that deflation played a part in boosting GDP.
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