Courtesy of Mish.
Economists and economic writers bemoan deflation. Meanwhile, consumers love it. Who doesn’t like better prices?
One side is wrong. Here’s a hint: It’s not the consumers who are wrong. Economically illiterate economists and authors are wrong.
Financial Times writer Nicholas Megaw moans Swiss Deflation Worsens Again.
Another month, another disappointing set of inflation statistics from Switzerland, as the country’s deflation problem refuses to budge despite its record low interest rates.
Consumer prices fell 0.2 per cent in November, compared to a 0.1 per cent rise in October, according to the Federal Statistical Office.
On an annual basis, the consumer price index declined by 0.3 per cent, worse than the 0.2 per cent fall predicted by economists.
The Swiss National Bank lowered its main interest rate to -0.75 per cent in an attempt to fight the appreciation of the Swiss franc last year, but the strong currency has continued to drive down the cost of imports, keeping the country in deflationary territory for the 25th straight month.
Swiss Unemployment Rate
Let’s explore this economic travesty starting with a look at Switzerland’s soaring unemployment rate.
Mercy! People have jobs and prices are falling. What could possibly be worse?
Economic Challenge to Keynesians
