John Abernethy, CIO of Clime, says there are three reasons for deflationary pressures globally

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John Abernethy, CIO of Clime, says there are three reasons for deflationary pressures globally. Firstly, there is simultaneous money printing from a number of countries resulting in an offset of the desired inflationary outcome. Secondly, global underemployment is keeping a lid on labour and production costs. Thirdly and most significantly has been the impact of China deliberately suppressing the value of its currency. The result is that the world has debased its manufacturing and exported it to China. Abernethy says that in the next decade the Chinese currency will definitely revalue and there is no threat that they will lose their manufacturing now that many countries have sent their own industries offshore. The reason we have no inflation and some sort of deflation is that China has exported deflation to the world by debasing its currency. The world has been conned and China is the winner (VIEW LINK)


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