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FINANCE AND ECONOMICS: “Debt and deflation: Depressing times; Are rich economies heading merely for a bout of falling prices, or for a 1930-style deflationary spiral?” The Economist, 15 November 2008.
Okay, I’m abusing the logic of the piece here a bit.
The spiral in question here is “I can’t sell because prices drop so much and because I can’t sell I can’t cover my debts and because I can’t cover my debts, I can’t buy, which means fewer buyers for what I can’t sell, and if I can’t sell . . .” and so on.
Thus the importance of China’s rapid recovery, as the EU and Japan dropped officially into recession right away, faster than America will eventually move into that category (on an official basis).
This is why Mr. and Mrs. M.C. Chindia are the most important people on the planet (my piece in
Good magazine’s next issue).
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