First Off, I'd just like to apologise to readers for being a bit erratic of late, but this is not a reflection of any flagging in my interest for Spain's problems. The thing is, in my opinion this is going to be a long haul - a very long one. And in fact the focus on and interst in the specifically Spanish dimension in the current (now global) crisis will obviously ebb and flow, as other events move into and out of centre stage. As a specialist in the rather more obscure topics I have been spending rather a lot of time looking into Russia's financial turmoil, and thinking about how that will affect Germany, and via Germany other eurozone countries like Spain. So the list of things to look at is almost endless at the moment, and I really sympathise with people who are feeling that this is all a bit to much for them at this point, and who may also, like me, be suffereing from short term memory "buffer overload".
Anyway. One of my big intuitions is that all that inflation may suddenly turn into its opposite, as credit dry's up all over the place, banks starts to hoard cash instead of lending it, governments use up their fiscal leeway to buy up bad debts (instead of being able to work via expansionary fiscal policy), and demand everywhere in the eurozone starts to weaken.
Inflation in Spain is already falling back, easing for a second month in September as slower economic growth relieved pressure on prices and oil fell. Consumer prices gained 4.6 percent from a year earlier according to the European Union's HICP methodology, following a 4.9 percent increase in August, according to the National Statistics Institute (INE) earlier today. Now all we can do is wait and see where it goes from here.
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