carey_jim

Isn't Deflation a Good Thing?

When bubbles pop they sometimes START a deflationary downward spirals but in themselves they don't signal deflation.

Also, deflation is not bad in itself unless it is extreme. Just like mild inflation, mild deflation can be a good thing.

When prices are continually dropping, people are encourage to save to buy things in the future but they are also encouraged to buy now, especially if they (like us) have experienced inflation all of their lives.

We are used to that concept when we purchase electronic equipment: I can by a Dell Latitude for a few hundred dollars that would have cost me two thousand only five years ago. This is true for almost all goods that are dependent on technological advancements.

For people who are cash rich, deflation makes everything cheaper and that can't be a bad thing (unless you are an economist of course ;)

Bring it on!