The Five Ways Deflation Has Already Taken Hold
This article is for subscribers only.
March 27 (Bloomberg) -- Of the seven varieties ofdeflation, five are already at work in the U.S. economy.
Commodity Deflation: In 2009 and 2010, the increases incommodity prices revived memories of the 1970s inflation spiralthat resulted from the earlier mushrooming costs of the VietnamWar and the Great Society programs. Speculators and investorsfurther inflated that bubble. Many pension and endowment funds,as well as individuals, became convinced that commodities were alegitimate investment class, like stocks and bonds, and theypiled in and even doubled their bets as prices soared.