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To: SouthFloridaGuy who wrote (1577)	12/18/2007 2:57:19 PM
From: grusum	Read Replies (1) \| Respond to of 1718

on another thread you mentioned fighting deflation. i want to ask you why fighting deflation is necessary? i understand that deflation and prosperity are compatible. the less something costs the more money you have left over. i certainly would not want to see a depression or even a recession. but i believe that deflation would be good for everyone. i know that wall streeters hate the thought of deflation. i think the reason that they hate deflation is because they automatically associate it with depression. another reason is that they know inflation is an easier environment to make money in. i would agree with that. i believe it is much easier to make a lot of money in a slightly inflationary environment. but i also think that in the long run a slightly deflationary environment is much more stable and rewards the right kind of enterprises. by the 'right' kind i mean long term investments that bring beneficial products rather than things like 'pet rocks'. i think that an inflationary environment encourages frivolous and mal investment more so than good investment and a deflationary environment produces the opposite effect. i think the reason for that is that when money is dear people think carefully before spending it. just wondering what your thoughts are..