| I agree with the author of TFA that Krugman is wrong. Just as every single Keynesians out there: they have never predicted anything more than short term (and what really hurts them is that there are economists from other school of thought who can repeatedly predict correctly over the long term. Ouch.). And I also agree that we should not fear deflation. However hoping that deflation will happen would be like waiting for some pink unicorn to show up: both the U.S. and the Japan have announced "unlimited QEs". In order words: endless money printing to prevent the utter failure of the Keynesian system. We'll not discuss the fact that if money is free to print this is not true capitalism at work (because the amount of new money in circulation doesn't correspond to the new wealth created)... But hey, this is a Keynes' world right, so what do you expect. Could anyone explain me how we'll anything other than inflation (and possibly a very severe inflation) when, worldwide, the biggest economies are doing "unlimited QEs"? If deflation takes place I'd be very surprised (and very happy too, because I'm a "saver"). I did hedge myself against inflation/hyper-inflation but I still do have lots of cash/savings. I'd love deflation to take place but with unlimited QEs it's never going to happen. |