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Strategies & Market Trends : The coming US dollar crisis
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To: benwood who wrote (25280)12/7/2009 2:17:06 PM
From: carranza2  Read Replies (2) of 71456
 
Yes, deflation caused by productivity gains would clearly be excepted. But that kind of deflation is clearly distinct from the kind of deflation BB fears.

It seems that productivity-related deflation occurs in distinct sectors, in a chronologically haphazard way, e.g., the development of the internet and other high tech items; they have revolutionized the manner in which things happen by cutting costs and increasing efficiency.

If I have understood things correctly, I don't think the Fed is worried about this kind of deflation, which is by and large salutary even if it does cause some dislocation. It is a deflationary spiral, something utterly distinct, that Bernanke fears.
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