Hi all, well I took the plunge this morning and topped up on a few shares. I suspect that the Greek story will have a few twists yet and the share price will go down before it goes up, but what's new there! GLA
Glad that's all over, Greece, one of the worlds oldest civilizations swallowing the modern economics pill. Despite international media having some kind of perverted regret at Greece being 'bullied' into discriminatory submission, I propose they were given more than they deserved. Now, BOI, let's look at '.50'.
Agreed - inflation is a handy way out of debt. The only problem is - I don't see any coming down the pike any time soon.
According to the OECD, the annual rate of inflation in its 36 members is a meager 0.56 percent. In the European Union, overall inflation is running at half the OECD rate at just 0.28 percent.
In many European countries, like Greece, Italy, Poland, Ireland and even Finland — there's no inflation at all — and instead, there's outright deflation, with Greece leading the pack, with prices now falling at a -2.14 percent annual rate.
To have consistent across the board inflation, we also need have wage inflation. Historically, some of the highest inflation rates are caused largely by wage inflation. Yet today, there is none. According to the International Labor Organization, based on latest data, wage inflation (globally but excluding China) is running at a mere 1.1 percent.
There's no commodity inflation. Despite all the money printing, commodity prices have been sliding for years now.
The supposed leading indicator for inflation is gold, yet it is in a bear market right now.
What's going on?
There's simply too much debt in the world. Global government debt reaches as high as $500 trillion, while global GDP is merely $75 trillion. That's a debt-to-GDP ratio of more than 600 percent.
That's going to keep a wrap on things for quite a while, IMHO. Just my 2 cents.
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