from Arabian Money:
Look around the world as ArabianMoney always does in the summer because the excessive heat of the Middle East drives us all to seek out cooler climates, and you very quickly realize this year that the main issue is deflation, not inflation.
Gas prices are falling with the oil price. Indeed, falling commodity prices are taking the pressure off input prices across the board.
The demand destruction of widespread economic contraction is doing the rest. Shop discounts are deeper to sell goods.
Hotels are struggling to sell rooms. Upgrades are cheap. Hire car companies can only give away their more expensive models.
Pricing muscle is low. Customers who overpaid in advance will not do so again, or certainly not next time.
Yet central banks are not unaware of this situation, or in any doubt about how dangerous a deflationary spiral could be to the global economy.
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