Original post:
I wasn't kidding with the earlier "This could get troublesome."
From Agence France-Presse via France24:
The near paralysis of prices is raising fears the eurozone may tip back into a deflation -- a vicious circle of falling prices, wages and output -- and is raising pressure on the ECB to act.
Even the US Treasury expressed concern this week over the "deflationary bias for the euro area, as well as for the world economy,"
Data released by the European Union statistics agency Eurostat on Thursday showed the annual rate of inflation across the 17-country eurozone fell to 0.7 percent in October, the lowest for four years.
At first sight this would seem to be good news for households which have seen their purchasing power eroded.
It should be the opposite of inflation, in particular hyperinflation, in which rapidly rising prices wipe out the value of money that people hold.
But in reality the "perverse logic" of deflation means it will have a sharply negative impact on households, according to Philippe Waechter, an economist at Natixis Asset Management....MORE
