Corey Ribotsky Update

The stagflation becomes a dilemma for monetary policy must choose between the measures normally used to increase economic growth and hence runaway inflation or a policy to combat inflation, which reduces the activity in an economy in unemployment. Normally, central banks must choose between drain or revive the economy by adjusting the interest rate on the money, this being its main task. Reduce the interest rate leads to economic growth but it triggers inflation, increasing the interest rate can fight inflation but reduces economic growth. In the stagflation we say that both problems coexist. Part of the difficulty that central banks face in stagflation is that it occurs selectively in different asset classes. For example, at the end of 2007, the values of homes in U.S. began to fall (deflation), while consumer prices started to grow (inflation). The efforts of the Federal Reserve (Tell the Central Bank of USA) to prevent falling house prices were to reduce interest rates to make mortgages more affordable. This causes consumers have more money available to reduce the price of credits.

TODAY online
Great Britain’s Retail Prices Index annual inflation, the cost of home loans, fell to minus 1.2 percent in April from minus 0 , 4 per cent in March, official data showed Tuesday.

Interactive Investor
DUBAI, May 19 (Reuters) – Qatar, inflation has fallen to zero and prices are currently regulated as a result of lower cost housing and other sectors, an adviser to the Gulf emir said in note published on Tuesday. “Inflation in Qatar is nil or less than zero. It is at this moment is negative,” Ibrahim al-Ibrahim said in a report carried out by the daily Al-Arab newspaper.

BBC News
UK annual inflation slowed again in April as consumers’ energy bills and food prices continue to drop, figures show.

AP via Yahoo! News
Gold rose slightly on Tuesday as the dollar slide against other major currencies. Other commodities, including oil and soybeans, also inched higher.

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