Can Inflation and Deflation Coexist?, Part II

By Robert Ringer

Could we actually be headed toward a massive deflation - perhaps a deflationary depression? To me, the bottom line is that the political buffoons in D.C. have things so screwed up that no one can predict with certainty exactly how our economic debacle is going to play out.

The only thing we can be certain of is that virtually everything the government does will make things worse. Regardless of whether it's "jobs programs," "rescue packages," or any of a myriad of other anti-free-market measures government loves to impose, its spending must be paid for in one of three ways: printing, borrowing, or taxing - and all three are bad for the economy.

Leo the Centimillionaire is right when he points out that we are in a deflationary period right now. But my guess is that once the Obama "change we can believe in" crowd starts implementing its massive New Deal II programs, a rapid increase in inflation cannot be far behind.

Lately, however, I've begun to ponder an unthinkable scenario ...

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Can Inflation and Deflation Coexist?, Part I