Deflation is here, and it is a real threat to any economic recovery from the virus

The price of a barrel of oil briefly fell below zero dollars this week, demonstrating clearly what happens when there is no longer demand for a product or commodity, as tens of millions of Americans are leaving cars in their driveways and airlines are largely grounded. All around the world, it’s much the same situation as the global economy has collapsed in the wake of the Chinese coronavirus pandemic. In that environment, prices fall, and sometimes they can fall all the way to zero with a sufficient collapse of demand. In the case of oil, there’s simply nowhere left to store the oil being pumped out the ground and as it is, it will take months or longer to clear existing inventories.-- More...