Mind Your Step

Mervyn King has regularly referred to the great moderation as the NICE era: Non-Inflationary Consistently Expansionary period. Obviously, those days are well gone as we are over three years into the credit crunch, a vast array of stimulus measures have been applied, and their effects are waning (see mike’s blog). So, if we are no longer in the NICE era, where are we? Well, growth and inflation will be low and people will feel pretty poor for a considerable period of time. How do you describe a period where we could experience Deflation, Unemployment, and, No Growth? DUNG!

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Discuss Article

  1. Trevor Rothermere says:

    Deflation? I think not. We have DUSI: Debasement (of Sterling), Unemployment, Stagnation and Inflation.

    Posted on: 22/10/10 | 12:00 am
  2. Jeremy Beckwith says:

    Sir Martin Sorrell has coined it as SLOG – Slow Low rates Of Growth

    Posted on: 25/10/10 | 12:00 am
  3. FLC says:

    Inflation will be low? I really do not see how we could possibly have that.

    Is this still what you are thinking?

    Exploding Myths

    Posted by Richard Woolnough on 28 January 2010 14:28:00 GMT

    Sir,
    I’d like to make a point here.
    Britain has gambled that the growth in its public debt would be matched with the means to repay it, I.E., strong growth. So far this has not been the case, and nobody knows and if that will ever occur.
    As the bond market have now raised the stakes, it has become increasingly likely that the government will fold its hand. This also means that a pursuit of QE is more likely.
    It may have to be more creative than just simply purchasing gilt, but monetary policy must fill the gap left by the withdrawal of fiscal measures, with sterling feeling the strain.
    So using nitroglycerin for restoring patients good health, might not be what is really needed here!
    Posted on: 25/10/10 | 12:00 am
  4. J T Foreman says:

    NICE it never was. We were taken for a RIDE:  Rising Inflationary Debt Explosion.

    Posted on: 27/10/10 | 12:00 am

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