[austrianecon]

Unlike inflation which as Friedman once said (and I paraphrase): 'is strictly a monetary phenomenon', deflation can be influenced by many factors. Deflation, in the classical sense, was a tightening of the money supply through bank credit contraction, something we don't have to worry about right now. I personally think that we are in a slightly deflationary period due to increased productivity and cheaper imports. This is the type of deflation that was prevelent for roughly 120 yrs prior to the creation of the Federal Reserve System. There is absolutely nothing wrong with this type of deflation.

[Deuce]

We are in a slightly deflationary period due to increased productivity and cheaper imports. This is the type of deflation that was prevelent for roughly 120 yrs prior to the creation of the Federal Reserve System. There is absolutely nothing wrong with this type of deflation.

We would be in such a situation---if we had an honest monetary system. However, those that can create money from nothing will find such a temptation/privilege too tempting to pass up