Deutsche Bank: 8 Reasons Why No One Believes Bernanke's Deflation Warnings


Photo: AP

Deutsche Bank’s US Economics/Strategy Weekly makes an interesting call about Ben Bernanke.Despite the talk of helicopters and warnings about deflation, the Chairman has too much anti-inflation credibility.

As soon as inflation becomes apparent, bond traders will expect moves to keep inflation below two per cent. And inflation is happening faster than you think thanks to a surprisingly robust economy.

#1 Strong GDP growth

#2 Record corporate earnings

#3 Hiring will pick up soon

#4 Corporate profits are sustainable

#5 Housing costs are the only thing keeping back CPI

#6 Home prices are expected to recover in 2011

#7 Oil prices are going up, thanks to a weak dollar and the global recovery

#8 Inflation gets passed on to the consumer

A bullish guide to the future

Now see how emerging markets are driving global inflation

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