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[ INFLATION / DEFLATION ]
Massive fiscal easing may unleash
the forces of inflation on the
economy – but deflation could
be an even bigger threat, writes
Anthony Luzio
The price
isn’t right
One of the most overused
metaphors about the
coronavirus crisis is that
we are “at war” with the
pandemic. While the analogy has
been stretched to breaking point over
the past couple of months, one way
in which many analysts accept there
are similarities is that when war is
financed from an ever-increasing
debt pile, rather than taxes, it
eventually leads to higher inflation.
If you want to know why this
is a problem, Sanlam UK’s chief
investment officer Phil Smeaton says
you should begin by taking a step
back and looking at what inflation
actually means.
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