“Smart Trade Group” – TraderChat – (Deflation?! What Deflation?)…

Added: (Mon Jun 29 2009)

Pressbox (Press Release) - ‘Smart Trade Group’ on why warnings of entrenched deflation are without foundation.

“Smart Trade Group”, the Asian-based investment broker, is thought to believe that the warnings issued by Western governments over the specter of deflation are baseless.

A source close to “Smart Trade Group” suggested that the firm remains unconvinced that deflation – a contraction of the money supply – is the problem that governments say it is. They contend that the only deflation that is taking place is that which is occurring in assets that are bought with credit; real estate etc and this is at the heart of policymakers’ efforts to increase the amount of money in the financial system.

Policies of profligate monetary and fiscal expansion have been rolled out in the US and the UK in an attempt to re-inflate real estate and equity bubbles but appear to have had only moderate success as markets in both nations continue their decline.

“Smart Trade Group” believes that the US and UK are running the risk of igniting an inflationary spiral which could see further damage done to their already fragile economies.

The “Smart Trade Group” source concluded by saying that prices of everyday items like food, fuel and energy were rising and that they were likely to rise further as currencies steadily lose their value.