wilheldp_PE
PE, LEED AP, SPAM KING
This story from the Associated Press is rather disturbing. It describes textbook deflation (prices are dropping due to reduced demand), but the article depicts it as a way to get a good deal on your next TV, car, home, or grocery purchase. The bad side of deflation is that it is a naturally self-perpetuating phenomenon. Prices continue to drop until they reach equilibrium with supply and demand, but demand will continue to drop because people don't want to buy something today at a higher price knowing that the same item will be cheaper tomorrow. This is the first step from the Great Recession to the Great Depression II.