Welcome to deflation

Cheap gas in Redding
The other day I wrote about gasoline prices falling twice in one day. It’s fallen again. Before you rejoice too much about the sudden cheap gas, you may want to consider it as a leading indicator of a deflationary economy. They didn’t just find more gas on Gas Point Road or anything. There was no increase in supply. Prices are falling with demand. What’s that mean for us? Well I don’t exactly know, but you might want to read what Fed Chairman Ben Bernanke said about this possibility 6 years ago today. Take a few minutes and read through his thoughts about the subject HERE. Definitely worth your time. Somewhat frightening, actually. (I got a couple of offline comments about my post scaring people. that wasn’t the intent. If you read the Bernanke piece, it looks like his main weapon of choice to fight deflation will be a printing press, to print a bunch of money to spread around “willy nilly” ((his words)) That’s a prospect you may want to plan for.)

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