Deflation Demon

October 29th's entry in Dan Young's 2009 painting a day series.

Some members of the Fed recently cited the threat of deflation -- a general decrease in prices -- which should not be occurring during an economic recovery. In many ways, it is more worrisome than inflation to an economy built on the premise that everything should get more expensive over time.

Audio Embed: All Things Considered 8/3/10, Reporter: Adam Davidson.

You've experienced inflation in the cost of gas & groceries and also in salaries or benefits received if that compensation included "cost of living adjustments." And beyond that overall rate, components like health care rose 7 times faster, university education 9 times and forget real estate, whose bursting bubble crashed the whole shebang.

Attempting to control inflation was always the great bugaboo cited by former Fed Chairman Alan Greeenspan, but since the series of corporate bailouts and falling interest rates began in 2008, inflation has been replaced as the buzzword. Some leading economists and investors are now beginning to worry about just the opposite. St. Louis Federal Reserve Bank President James Bullard explains.

Audio Embed: All Things Considered 8/3/10, Host: Michelle Norris.