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Tuesday, June 25, 2013

Deflation is it really so Bad?

An excellent article titled, "What's So Scary About Deflation?"  from Frank Hollenbeck, Phd on Deflation. Many mainstream economists fear deflation but love a little inflation. Dr. Hollenbeck rejects this notion. Here is a key excerpt:

"Inflation is much worse than deflation because it robs wage earners and the poor. Central banks are the primary cause of inflation and are the main reason for the growth of income inequalities, as the rich get richer and the middle class sinks toward poverty. This income trend has been self-evident and growing since the demise of the Bretton Woods system in 1971 and its replacement with fiat currencies. Central bank power depends on the ability to generate inflation."

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