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<p>[QUOTE=&quot;MEC2, post: 1983289, member: 38692&quot;]As I said, the advent of fiat currency removed one of the largest problems related to currency deflation - shortage of specie. And again, deflation usually is felt because of a commodity valuation problem - property, metal, etc. Japan&#039;s deflation was due to property value overvaluation (inflation disguised as deflation). </p><p><br /></p><p>Depression era deflation was due to constriction of money supply by the Fed - as well as some natural deflation as the economy slowed. The economy was poor but the dollar survived intact. The same cannot be said of hyperinflated economies. An 1880 Dollar is a dollar. A 40 year old Peso is not a peso. Or a Weimar Mark. Or a Greek Drachma. These are currencies that were absolved of all value due to inflation - became absolutely worthless. Deflation creates economic drag but I cannot think of a single fatality of a currency or economy due to it. And most deflation issues are caused because something has become overvalued - contraction due to maladjusted expansion.</p><p><br /></p><p>The US faces little economic worry due to deflation. Inflation however is not only underreported currently, but it is ipso facto the only pending problem that fits current facts - enormous debt that is unsustainable, that can only be addressed by devaluing that debt. Inflation helps debtors, and the US government is the worlds largest debtor.[/QUOTE]</p><p><br /></p>

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