Ed’S Education

I
will touch on this subject in upcoming months.

The reason deflation might be a cause of concern is that

a). the
talking heads on television talk about it,

b). the cost of a “basket
of goods” falls making things cost less,

c). consumers can get into
the mindset of ‘If I wait to make this purchase next month, it’ll
cost less’.

I’m all for lower prices but they need to come from savings made
from efficiencies of production, not deflation. This kind of
deflation is what we experience as Company X moves its plant to
Mexico and produces widgets for Walmart to sell. When the plant was
in the U.S. the widget cost $5, since the move you pay only $4. This
is the good deflation.

Let’s look at the examples from above shall we?

We can dismiss the talking heads, in general the guys on t.v.
gypsy horse