Governments and central banks will do almost anything to stop deflation. Inflation targets, set at typically 2 percent, are public elements of their mandates, with a blend of ever-increasing, wild ideas to keep inflation going. Any real growth that the world has seen is only because of an unprecedented spending spree fuelled by easy credit and debt that masks what is really happening underneath. The problem comes from believing we can outrun deflation and the natural order of things by creating more and more debt. It’s a bit like trying to flap your arms to fight gravity: gravity will win.
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