Inflation Deflation Red-flation Blue-flation »
Posted By populist 2 months, 3 weeks ago in Business & Finance
Most people are led to believe that deflation is a bad thing, but it is not. In fact, it is precisely what the economy requires to eliminate the malinvestment created by the Fed's inflationary policies. Unfortunately, deflation tends to be politically unpalatable because it causes, among other things, a temporary increase in unemployment as capital resources are reallocated to more productive sectors. Accordingly, it can be expected that the Fed will do anything it can to avoid deflation, not to mention the fact that its chairman, Ben Bernanke, has gone on record discussing the importance of preventing "deflation"
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