With inflation rising, reduced purchasing
power and high unemployment, fears of
stagflation,which in the long run could lead
to deflation have crept back into the economy.
Stagflation occurs when the economy has slow
growth, unemployment has risen to record highs,
and prices are rising or the country is in an
inflationary stage.
Inflation happens when prices are shooting
up and people can't afford to go shopping
because the dollar has become worthless, or
the consumer has to pay more for the same
product(oil,food, grains, etc.)that cost
less a few days ago.
Deflation occurs when price levels decline
not because of competition, but demand for
a product has decreased due to layoffs,
reduction in wages and due to decline in
real estate values. Prices are reduced
to get people to buy.
It all sounds too familar and further speaks
to the need for smart money management.
Sheila McKinney
