Oh no, things are getting cheaper

Policymakers have been consciously reinflating asset prices ever since the GFC to stave off a downward deflation spiral, but the day of reckoning may be approaching.

While paying lip service to concerns over escalating property prices and stockmarkets and the threat from bubbles, world policymakers have been knowingly inflating the value of assets for years in a bid to prevent a curse far, far worse: deflation a la Japan.

Confirmation that the 2014 oil shock has pulled Europe back into deflation for the first time since 2009 was immediately and predictably followed by a rally in stock markets, up on the easy bet Europe will turn up the stimulus.

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