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Don’t panic… yet

How pleasing to return from holiday to discover that the chumps who manage our savings have finally woken up. But the pleasure in seeing US and European stock markets at a slightly less loopy level is marred by the extremity of the money men’s mood swing. Many of the people who recently shrugged off the problems of Asia as a disinflationary non-crisis now seem convinced that global deflation is imminent.

The excuse for all this gloom is fear of the so-called negative wealth effect-a presumed reluctance, especially on the part of Americans, to spend money when their…

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