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| Subject: deflation In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the annual inflation rate falls below zero percent (a negative inflation rate), resulting in an increase in the real value of money – allowing one to buy more goods with the same amount of money. This should not be confused with disinflation, a slow-down in the inflation rate (i.e. when inflation decreases, but still remains positive). As inflation reduces the real value of money over time, conversely, deflation increases the real value of money – the functional currency (and monetary unit of account) in a national or regional economy. Deflation Economics By John Schroy, on April 10th, 2010 |  Leave a comment  Deflation is said to occur when general price levels fall. The last important example of general deflation in the United States occurred during the Great Depression. Federal Reserve officials and central bankers around the world often regard deflation as a greater risk than inflation. Under the Obama administration, US central bankers are now wary of both deflation and inflation. April 10th, 2010 | Print Article |  Email Article |  Topics: Asset-backed Securities, Barack Obama, Bonds, central bank, deflation, efficient market hypothesis, Federal Reserve Bank, fiscal deficit, Franklin Roosevelt, Great Depression, Inflation, labor unions, Macro Economic Theory, money market funds, rating agencies, Ronald Reagan, savings, sub-prime mortgages, trade unions, unemployment, US taxation | Category: Economic Theory, featured | Leave a comment |  Short urlThe nuclear option By John Schroy, on May 15th, 2009 | 2 comments  The Obama administration is passing deficit spending programs of such magnitude that inflation is inevitable unless steps are taken to remove money that will be pumped into the economy as the government pays its bills. The classical solutions are to sell government bonds, increase taxes, or increase bank reserve requirements. The last tactic can be extremely effective if carried to the extreme. This is what I call ‘The Nuclear Option’. May 15th, 2009 | Print Article | Email Article | Topics: bank reserve requirements, Barack Obama, Ben Bernanke, deflation, Federal Reserve Bank, Franklin Roosevelt, Harry Reid, Jimmy Carter, multiplier effect, Nancy Pelosi, US taxation, US Treasury | Category: Inflation | 2 comments | Short urlUS Politics By John Schroy, on March 20th, 2009 | 2 comments  The Obama administration’s policies of increasing taxes and attacking capitalists in the midst of a recession suggests that the future may be deflation and continued unemployment. However, Obama’s popularity is falling rapidly. The voters may rise up in 2010 and put a stop to his destructive policies. However, the effects of the extreme deficit spending of the Pelosi-Reid Congress will continue. This suggests that the threat will be inflation, not deflation. How prepared are Americans for high inflation? This article outlines what to expect. March 20th, 2009 | Print Article | Email Article | Topics: AIG, Alexander Hamilton, annuities, Barack Obama, Brazil, Brazilian Miracle, deflation, Inflation, Insurance, New Deal, Real Estate, Timothy Geithner, US taxation | Category: Inflation | 2 comments | Short urlFeatured articles on inside pages
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