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Deflation expected to lift growth in US but plunge Europe into crisis

Weaker growth, higher joblessness, more intractable bad debts make continent more susceptible to bad deflation

Washington

WHEN it comes to deflation there's the good - and there's the bad and ugly.

Europe faces the risk of the latter as it teeters on the edge of a recession that could trigger a debilitating dive in prices and wages. The US, meanwhile, may end up with the more benign version as surging oil and gas supplies push energy costs down and the economy ahead.

"Bad deflation weakens growth," Nancy Lazar, co-founder and a partner at Cornerstone Macro LP in New York, wrote in a report to clients this month. "Good deflation lifts growth." Shee also co-founded International Strategy & Investment Group LLC more than 20 years ago.

That's welcome news for US investors. Billionaire Paul Tudor Jones, one of...

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