Falling Prices Raise a New Fear: Deflation
This week's news of a drop in consumer prices may sound on the surface like a good deal for financially strapped U.S. households. But economists warn that sustained deflation -- a period of falling overall prices -- would deepen the nation's economic troubles. Such a period would make it harder for people to repay debts and would prompt consumers to delay purchases in anticipation of lower prices and harder times. Full Story »
Posted by Derek Hawkins
Deflation is the other side of a market collapse, which many forget can accelerate a downward spiral radically. Deflation is rare, but calamitous.