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Fabius Maximus on the Economy

Fabius Maximus, in a post ti tled " New recommendations to solve our financial crisis (and I admit that I was wrong) " reassesses the financial situation in light of recent developments. Fabius' thoughts on the economy are always valuable and thought-provoking, and his newest predictions (showing his willingness to admit he was wrong and reassess things) are the best analysis of the global economic situation I've seen so far. I definitely recommend the whole thing, but here are some excerpts: For deep theoretical reasons our financial system is collapsing. I have discussed some of the reasons in other posts (see below for links), but the causes are irrelevant now. Whatever the cause of a cardiac arrest, the paramedics’ job is not to advise dieting and exercise — but to restart the heart. The US economy is sliding into deflation. Deflation trashed Japan’s high-savings economy for a decade; two decades after the crash it remains weak. Deflation is potentially letha...
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