My Two Cents

Deflation is here

Chris Farrell Apr 15, 2009

The Consumer Price index fell by 0.1% in March. Consumer prices dropped by 0.4% year over year, the first annual decline since August 1955.

The deflation we’re seeing largely reflects the Great Recession. But it’s more than that. It is a fundamental shift in the economy from a bias toward inflation to a bias toward deflation. It’s the ecomomic way of the world.

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