Here's a long due update on price levels graphs for various housing bubble countries (the US, Australia, UK, Ireland, and Spain). Out of interest, I also include Japan, Iceland, Greece, and the EU27 area, as each has played a prominent part in crisis headlines over the last couple years.
Here are the actual price levels (not rate of change):
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEa4_WfccTQ0mmPJIVnzjuKj6IEpZxpZB3dw67Mb5qjMuaQhduiD9esFnxS_J5bts7tei8gGGWtSsJkFaD4GjSizCJZ3kKAbqr4WPPopBVoDSk4NNU2W__sxhcd1y4I9RQRrP9b73Ih_fw/s400/International_CPI_Level.png)
(click on chart for a larger version in a new window)
- Price levels in Japan and Ireland appear to have bottomed out around January of this year.
- The US suffered the biggest decline in 2008 and has yet to reach its previous price level peak.
- The remaining countries have continued an upward price level trend, each to a different degree.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwZyyLOkxnzkF_5paQoejQwy6qudnAgb0BQWBKe9CnLg9TeOWFBnYDqkK1vVZqWlksXMSK_GQ1Avrp9NA4H8_tbk3CX8mveOf9E2qvnidHrCt8sbPmif4MGab-uP-lxqY8z4CPiBTQWwUO/s400/International_CPI_YoY.png)
(click on chart for a larger version in a new window)
- Inflation in the UK and Australia currently seems to be flattening out in the 3% range.
- Inflation in Greece has kept rising and is over 5%.
- Inflation in the US is falling.
- Inflation in Spain and the EU27 region is around 2%, with the trend unclear.
- Japan and Ireland both have a moderating level of deflation, moving toward flat line (this is more visible in the prior price level graph).
Here is the exact same graph zoomed out to a larger Y-axis scale to show Iceland in full:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxIPgZb1XFfKPF5XJoo7D2-9NBlBJEIRhZHUbOpszxULlCgEhlpy3nbUAvVg8_ngBcGV2zTgKmMRuRcs29Q11Qqa4L94DSb94syjAgBITvMpMEI5OHvRSqz2CtVLJG0w6N5yXAPxp21Ag2/s400/International_CPI_YoY_Iceland.png)
(click on chart for a larger version in a new window)
Iceland is the extreme outlier of the group, with the inflation rate peaking over 20%, and falling continuously in the last year and a half. I don't know all the reasons for Iceland's experience, but currency changes must be a large factor. In 2008 its currency value crashed to less than half of its previous level against the dollar, as shown in this ISK to USD chart:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxQDcYTaY7vmOzZbDk2DX4pjoI53z-tj8aN-CrlfVgPr74kCcDlk9meFwAlB1tChyVqKA1__nKuKhyokMvzqsjFXSIaIfE7mwS3jr_k-5nP04V3MwLU4w_KNENnbOOfAsKYTcnt7hj43cC/s400/ISK-USD.png)
(click on chart for a larger version in a new window)
And as of 2008, it was more dependent on imports than most countries, with their value measured at around half of Iceland's GDP (via Google Public Data):
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyhtpt4FECKAgNIdOxUv2zquShbWeFuhJtVGqAQHQC_TXtm0Hy3_ZOUraMlN9N0-NnEms9rtzADe1RnRkIxd5AgIVA_WzQO7vFS08SCv9rC94tvvUuK8xvIefSLFuJ8CNhwRL3br4WdcZ-/s400/ImportsToGDP.png)
(click on chart for a larger version in a new window)
No comments:
Post a Comment