"Thanks to the wisdom of Gordon Brown, the UK has endured a decade of grossly irresponsible fiscal policy. This is the start of a period of zero-credibility in terms of monetary policy too.
We are kidding ourselves to say "inflation is dead". Fiscal policy and now monetary policy are wildly expansionary. Across the Western world, multi-billion dollar bail-outs are being funded by issuing debt and printing money - which will generate a new wave of inflation, making it even harder to escape the slump.
Suddenly, a consensus has sprung from nowhere that the Western world faces "deflation" - a situation where prices fall. Deflation is dangerous. Debts rise in real terms and price signals stop working."
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