Articles like these have people confused about what inflation is. Indeed every week I have someone email me that "We have inflation and deflation at the same time."

No we don't. It is not possible. The reason is falling prices are a symptom of deflation not a definition of it. Falling prices frequently accompany deflation, but they are not a necessary ingredient.


tvsterling at 12:38 2009-08-21 said:
Maybe it's all about our pluralistic society. Just how much power does government really have over the various parts of the country? If the people say forget you & start saving instead of spending what can Government do? The Limolizard crews from the big cities (mostly in the northeast) are going to sit on whatever assets they have (or stole from the taxpayers) & if Government says LEND the Limolizards say, "Take that up with our legal department." What can Government do? They only get the second rate lawyers anyway, all the really good ones work for the Limolizards. I say Government can only do so much & maybe they are ruining everything by trying to be as big as they think they are. One quick comment on 'Global Wage Arbitrage'; America & Europe CANNOT compete head to head with the nameless hordes of workers in Asia. There are more of them than there are grains of sand on the beach. The sooner we accept this fact & stop trying at the expense of our own future the better off we will be. It is time to pull down the false idol of Globalization. Permalink

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