Having been persuaded by the inflation hawks for some time that the globe faces a world of rising prices, I have decided to renounce that belief. The reason is I do not think the industrialised world can pull itself of the tailspin without radical action.
There is no global uptick of demand. Germany's collapse is because it acted in Europe like China did to the rest of the world - exporter of first resort. Markets have gone and so has growth. Japan remains in a deep funk politically and economically. The UK has managed pale growth thanks to a sterling devaluation and massive spending. The US economy is doing worse than many imagined.
The rich world is wondering what is there to sell at a good price - and who can buy it? There is also in the rich world an excessive desire to save. Governments are discovered their Minsky moments - and are now effectively lending to their nation's households and businesses to bail them out.
The threat is now deflation. Falling prices, the paradox of thrift and the era of Austerity. People's tastes will become blander through lack of purchasing power. Goods will be under-engineered. Simpler and cheaper will be the watchwords of our coming lifestyles. As Keynes said, the facts have changed. Time To Change Your Mind.