Here's their new "theme." Deflation in China. Whatever.
Nouriel Roubini:
What is the risk of a deflationary spiral in China?
http://www.rgemonitor.com/10000?cluster_id=3393
Mish Shedlock:
Chinese Deflation Picks up Steam; Recovery a Mirage:
In regards with China, there is massive overcapacity already. US consumers are still retrenching. Adding to China's productive capacity is exactly the wrong thing to do at this stage. The export model is dead. The Shopping Center Economic Model Is History as well. Thus "stimulus" (here and in China) is guaranteed to fail, leaving still more overcapacity when it does.
Green shoots are a Keynesian mirage.
http://globaleconomicanalysis.blogspot.com/2009/05/chinese-deflation-picks-up-steam.html
The Telegraph:
Chinese deflation picks up speed
http://www.telegraph.co.uk/finance/economics/5307345/China-suffers-defaltion-for-third-month-in-a-row.html
And then you have the deflationistas. Ron Insana of http://www.thestreet.com/
The 'Flationistas Are Flat-Out Wrong
Many pundits have suggested that the surge in the stock market, the comeback in commodities and the recent rise in interest rates is a sure sign that inflation will quickly become our next long national economic nightmare.
I'd like to kill this inflation debate before it ever gets started. The wrong-headed view of the 'flationistas could lead policymakers to prematurely end the programs that are preventing a two-year meltdown in our financial system and our economy from becoming a 1930s-style disaster.
Further, the 'flationistas who are issuing these Cassandra-like warnings could not be more misguided about the direction of the economy in general (and inflation specifically) over the next few years.
First, we are still in a period of deflation! Although stock and commodity prices have bounced off of their bear-market lows -- and quite impressively, I have to admit -- they are still well below their all-time highs of recent years.
http://www.thestreet.com/p/_rms/rmoney/investing/10499224.html
China dictated prices to increase demand. Doesn't that affect prices?
How about oil? Why isn't that at $30. Or is that because prices are dictated on the margin by the futures market?
The deflation argument is yesterday's news.
But that's the viewpoint permeating their thinking.
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