Chat with us, powered by LiveChat
Menu

Threat of Deflation is a Negative Sign for the Economy

Threat of Deflation
Print Friendly, PDF & Email

EDITOR NOTE: Economist forecasts are all over the map. A few are convinced that we’ll see growth with moderate inflation. Some call for higher inflation, while others are concerned about stagflation ala 1970s. A handful of economists, less on the fringe and more toward the mainstream, are beginning to warn of hyperinflation. But not many are publicly discussing the threat of deflation, as the few who claim it as a primary cause for concern in the article below. They’re worried about a significant drop in prices, enough to curtail spending as the price of financial assets and of goods and services may be cheaper tomorrow. They’re worried this would slow down growth as companies may have to cut production amid a supply glut, leading to layoffs and salary reductions. They’re afraid of the recession that might follow such a severe deflationary environment. And what’s the Fed to do--restart the cycle of QE as the government continues to spend and drive up the national debt to kickstart the economy, once again?

Bank Failure Scenario Kit - sm2

GET YOUR FREE

BANK FAILURE SCENARIO KIT

  • This field is for validation purposes and should be left unchanged.

All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

Precious Metals and Currency Data Powered by nFusion Solutions