This article from 2008 when sound like 2014-stronger grad fight deflation As Economy Slows, Deflation Could Loom By Michael A. Fletcher Washington Post Staff Writer Tuesday, October 7, 2008 After steep price increases that sparked concerns about inflation earlier this year, many prices have fallen lately. Oil and other commodity prices are down sharply since midsummer. Housing prices have continued their long slide. Meanwhile, consumer spending has slowed and the economy is shedding jobs at an increasing rate. Credit markets are frozen. The confluence of trends has some economists worried that the country could be headed for a debilitating cycle of deflation: a period in which weak consumer demand, falling prices and tight credit ignite a downward spiral of still weaker demand and still lower prices. Under this scenario, as some businesses are strangled, joblessness increases, feeding the cycle. It was just a few months ago that everyone was obsessed with inflation. Now its deflation, said Bill Gross, co-chief investment officer at Pimco, an investment management company. I think its a possibility.
Posted on: Mon, 01 Dec 2014 06:02:36 +0000
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