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Is deflation the real threat to our economy?

Don't be confused by the rhetoric you read and see in the media. We are definitely in a deflationary spiral. Who says so? And what data are you looking at?

Let's read a few quotes from leading traders and analysts:

  • Nobel laureate Joseph Stiglitz said: "Deflation is definitely a threat right now."
  • Charles Evans, Federal Reserve bank president says: "Disinflationary winds are blowing with gale force effect."

Continue reading Is deflation the real threat to our economy?

For U.S., deflation remains the greater risk

The new year has arrived, and the inflation hawks -- in this case they're more like inflation police -- apparently have not made balanced analysis one of their New Year's resolutions.

The inflation hawks continue to harp about the danger of "rising inflation" in the U.S., due to the U.S. Federal Reserve's $2.3 trillion balance sheet and Congress's likely large, $700-850 billion fiscal stimulus package as the new Obama Administration takes office.

Where's the inflation?

Still, economist David H. Wang wants to know if the inflation hawks have been evaluating the same economic statistics he has been reviewing.

"Where is this inflation they are talking about?" Wang said. "Based on the 6-month and 12-month trend data, deflation, not inflation, remains the far greater danger. We are more likely to see deflationary conditions than an increase in inflation in 2009, with only a modest increase in inflation in 2010."

Continue reading For U.S., deflation remains the greater risk

Symbol Lookup
IndexesChangePrice
DJIA-28.5710,422.38
NASDAQ-10.212,165.80
S&P 500-1.591,104.65

Last updated: November 24, 2009: 11:05 AM

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