From Mish's Global Economic Trend Analysis:
It's time to stop pretending. Deflation is here and it is now. Anyone who sees stagflation or inflation out of what's happening now missing the boat. Let's consider the evidence.
Yield Curve As Of March 16, 2008
click on chart for sharper image
Are short term interest rates at 1.16% and falling indicative of stagflation? Certainly not.
Note: That chart is from yesterday, today short term rates are 0.97%
Stagflation theories die on the vine with the above chart. It really is as simple as that. Interest rates are not supposed to fall in periods of stagflation.. However, short term rates at 1% or even .5% do not prove deflation either....MUCH MORE
