Step Aside Abe's Deflation "Monster"; Meet LaGarde's Deflation "Ogre"

Tyler Durden's picture

What could be worse than a falling cost for things that the increasingly cash-strapped consumer desires? We are not entirely sure but Christine Lagarde is deathly afraid of it...

  • *LAGARDE SAYS RISING RISK OF DEFLATION MUST BE FOUGHT DECISIVELY
  • *LAGARDE URGES OFFICIALS TO `FORTIFY THE FEEBLE GLOBAL RECOVERY'
    *LAGARDE SAYS U.S. MUST AVOID EARLY WITHDRAWAL OF FED SUPPORT
  • *LAGARDE: JAPAN'S INITIAL BOOST FROM `ABENOMICS' WEAKENING A BIT
  • *LAGARDE SAYS EURO-AREA MONETARY POLICY `COULD STILL DO MORE'

In other words, 5 years of debt monetization on an unprecedented scale were not enough! Get back to work Mr Draghi, Mrs Yellen, and Mr Kuroda.

 

Lagarde (via Bloomberg):

"The world could create more jobs before we would need to worry about the global inflation genie coming out of its bottle,” Lagarde said in a speech at the National Press Club in Washington.

 

If inflation is the genie, then deflation is the ogre that must be fought decisively,” she said.

 

She recommended that central banks in the most developed economies wait until “robust growth is firmly rooted” before ending unconventional monetary policies.

 

...

 

In the U.S. “it will be critical to avoid premature withdrawal of monetary support and to return to an orderly budget process, including by promptly removing the debt ceiling threat,” she said.

 

It seems its inflate-or-die - no matter what the damage (but weren't we told that recovery is here?)