Deflation is a real risk to the big North Atlantic economies even if Central Bankers are focussed on the opposite risks. This article from the Knowledge @ Wharton summarises the current situation well.
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2587
On Deflation the K@W article above cites a paper we read a couple of weeks ago by St Louis Fed President James Bullard titled "Seven Faces of 'The peril'" In the paper Bullard "discusses the possibility that the U.S. economy may become enmeshed in a Japanese-style deflationary outcome within the next several years." It's a wonkish paper but basically says that if the Fed signals it is going to keep rates low for an extended period it is counterproductive. Wonkish but worth the effort. http://research.stlouisfed.org/publications/review/10/09/Bullard.pdf
America is a conundrum to people outside. How can the wealthiest Country in the history of the Planet also have so much poverty. The newswires are all carrying a story from the Census bureau on poverty. This follows on from recent data on food stamp usage which is at a record. Here's a link to the ABC's version of the story. http://www.abc.net.au/news/stories/2010/09/17/3014196.htm
This is what happens when interest rates are zero and the cure for the disease is the same as the cause. FT Alphaville has an interesting article on the Junk Bond bubble. Our view is that if you can get money free then you don't default which distorts statistics in what is a very weak global economy. http://ftalphaville.ft.com/blog/2010/09/16/345311/junk-windfall/
More people offshore thinking there is a bubble in Australian Housing. At least here though Barry Ritholtz does try to make a point about differences in markets. He is our co-favourite blogger with Yves Smith. Both of whom are much more than that. http://www.ritholtz.com/blog/2010/09/realty-bubble-monitor-long-term-charts/
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