Less worse
Apparently, there are some "signs of recovery" in the world economy in recent days.
Well, economists and the US President have re-defined "recovery". Yes, unemployment is rising and bankruptcies are rising sharply. Yes, the housing market is still dead. And yes, car manufacturers and others are joining the banks and going to the government for help.
The governments themselves are not too rich either and are slowly creating a debt crisis of their own right.
But, things are getting "less worse" (a new term). That is to say, the stock markets are not falling as much as people thought, housing transactions and values are on a downward trend but not as sharp a trend as people thought, and so on.
In other words, the decline continues, but at a rate slower than some analysts were predicting.
Which could either mean stabilisation is on the way, or that those analysts panicked so much with "sell sell sell" as they did with "buy buy buy" in 2008.
My advice to everyone is not to listen to analysts, or at least to choose your analysts wisely.
What does deflation mean
For savvy consumers, it means bargaining for the best deal and feeling proud to get better prices than last year. Accroding to Office of National Statistics Personal Inflation Calculator I've been living in deflation for a while.
For businesses though, this can mean making a challenging environment even worse. Once people get used to thinking that prices will fall, they postpone buying anything until they do. Which in turn adds to the economic problems.
This BBC article discusses what deflation meant for Japan in the 90's - just as the UK reports its first deflation in decades.
World recession
This is pretty serious news. Japan shrinking a good 7%, the rest of the world also shrinking for the first time since WWII.
And noone wants to see WWII devastation anywhere.
Economics has definately become my new favourite topic.
How will China cope?
An interested question that has started coming up in some side columns is the likely effect of the global economic crisis on China. Robert Peston has even gone there for a week to report from the ground, ignoring his reporting here at home.
Clearly, the Chinese government is better prepared for this than the West - with well capitalised banks, and a big fiscal surplus in recent years, the Chinese can at least count on borrowing and government spending for some time.
However, the problem remains. If there is no demand for your products, loans to keep a business going serve little purpose.
I hear that the Chinese have started a big campaign to boost internal demand. They are encouraging people to buy household appliances and cars. In economic terms, this is encouraging using some of those savings that have accummulated to prop up businesses in this downturn. It's better to equip each house with a TV at the expense of the state than to close down the TV factory.
In real terms, what we are actually seeing is the beginnings of a massive increase in living standards for the biggest nation on earth - while the West is experiencing the sharpest decrease in living standards in decades.
Is this the time when the world really converges? Globalisation scholars will tell you that this shift was long overdue. I bet some people in the West never wanted, and still don't want to hear.