Why is Deflation Bad?
Many people ask me why is falling prices bad. Other then the obvious threat to companies who sell the goods making less profit, and maybe cutting employment etc. there is the bigger risk to the economy that people in the herd put off major purchases in anticipation of cheaper prices. This race to the bottom mentality comes full circle to put additional pressure on businesses profit margins etc. I know it is hard not to scream and cheer when you pull up to the gas pumps and see .80 cents a litre for gas remember what that does to the overall economy. If your livelihood depends on a strong economy then be careful what you cheer for.
