wyvern

Defining Deflation

While I do believe that the prices of many big ticket consumer goods are dropping, it would seem to have more to do with the immediate lack of funds with which to make the purchases and not necessarily a case for outright deflation. As consumer credit begins to dry up over the next year this trend will continue for the forseeable future. (short term) As regards to the overall deflation of the currencies of the world your conclusion would most likely be accurate during normal monetary policy however what will most likely become apparent next year is that the central banks of the world have gone on a mad inflation frenzy whose effects have not yet begun to manifest themselves as of yet. You have the drying up of consumer credit and inflation of world currencies, couple that with a global recession that will last for at least another year and you begin to have some serious issues.