Inflation-Deflation Discussion: Why Deflation Is Much Worse

In the US and Europe, for the most part, we havent seen mass deflation since the Great Depression. With so few people alive when it last hit, it is easy to ignore the impact.

For this reason, we have to look at some of the general tendencies of both. Why is deflation so horrible?

In this video I discuss the self reinforcing, instead of self correcting, nature of deflation. This means that, once it starts, it is impossible to stop. The result can last decades as evidenced by Japan.