Ghost of deflation haunt European Economy
After 2.5 % in 2012, 0.7 % en 2013, inflation drops to 0.4 %.
(source les échos)
Economist Paul Krugman (nobel 2008 of economy) foresee Europe to follow Japan 90’s situation and try to alert Europ to prevent it. “Western countries have not learnt anything from Japanese mistake”
Already in Europe, Greece and Spain have negative inflation and the trends clearly bearish. So far there are no coordination at european level to counter the trend.
The only good news on this dark scenario is the strong dollar that should inflate import price and help euro not to slip on deflation. Appart from the currency, no growth, high unemployment level, intense competition between european country on fiscal condition to attack investment are the main ingredient on deflation cake.