PrintDecember 22, 2009
The Deflation Threat
Contrary to what you are hearing in the media, the worst economic news may still lie ahead: A deflationary depression is descending upon us. Could it help the conservative movement?Breakneck federal printing of debt and dollars, gold and stocks rising, the dollar falling -- surely these trends presage inflation, or even hyperinflation. So goes the narrative across the media. But a contrarian and increasingly likely view is that deflation, not inflation, awaits.* What is deflation? How will it develop? How will it affect us? And what does it mean for the Democrats' future?Most of us have known only inflation, in which prices rise over time. In deflation, prices fall. The last time this happened in the U.S. was during the Great Depression. Japan has been living it these last fifteen years.A falling price trend is at first a benefit to consumers. But then it leads to a spiral of economic decline: a depression. Deflation occurs when money for whatever reason becomes scarce, and therefore...(Read Full Article)
