Via Paul Kedrosky, Bloomberg columnist Dave Wilson discusses the signs that deflation is significant and its here in this economy, and (as we’ve discussed) how it explains the simultaneous bond and stock rally
- Import prices have fallen off a cliff.
- Domestic makers are forced to compete.
- Weak economy persists.
- Government bonds can keep doing well in deflationary environment.
- Banks will be forced to keep buying government bonds.
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