SocGen's Edwards: We are now just one recession away from Japanese-style outright deflation

Permabear Edwards said this was clear evidence of the re-emergence of a deflationary trend, which when the "inevitable" recession comes will cause "havoc" throughout financial markets. He said: "If inflationary pressures are indeed ebbing in the US economy, this begs the question that if the third-longest cycle in US history cannot produce a cyclical uplift in wages and prices, what on earth will happen in the next recession! "Investors might give some thought to the fact that we are now just one recession away from Japanese-style outright deflation!" He added: "The macro underpinn...