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We Can't Win

November 19th, 2008 at 05:43 pm

Everyone I know, myself included, is doing the happy dance over the falling gas prices. Here in northern CA we are paying ~ $2.15 a gallon, down from the high of at least double that just a few months ago. This is a good thing, right?

Well, not necessarily. This morning I read an article on CNN.com about the

Text is negative impact of falling consumer prices and Link is http://money.cnn.com/2008/11/19/news/economy/cpi/index.htm?postversion=2008111910
negative impact of falling consumer prices. WT heck??? Yesterday we were worried about inflation and today it's deflation. Consumers are happy, but economists are not. Go figure.

Posted in Saving Money, Live and Learn | 4 Comments »

4 Responses to “We Can't Win”

  1. thriftorama Says:
    November 19th, 2008 at 05:48 pm 1227116914
    1227116914

    I don't think fluctuating energy prices should count as deflation. I mean, they are bound to go up and down. I think statistics can be misleading.

  2. Analise Says:
    November 19th, 2008 at 06:12 pm 1227118372
    1227118372

    thriftorama - The fall in energy prices are discussed in the article, but apparently economists are looking at the big picture, via the CPI. It includes groceries, but I haven't really seen a drop in food prices, have you?

    While lower prices are good for the consumer, if prices fall too much too soon, deflation can actually wreak havoc on businesses. Lowered production will result in job losses.

  3. merch Says:
    November 19th, 2008 at 06:57 pm 1227121069
    1227121069

    I'm not too worried about the deflation. Commodity prices spiked up so fast it was unbelievable. Oil was over 140 a barrel plus you had summer gas formulas.

    I worry more about stagflation.

    But don't we constantly see deflation in technology? Prices of TVs keep dropping and computers.

  4. Analise Says:
    November 20th, 2008 at 01:16 am 1227143767
    1227143767

    merch - you are definitely right about deflation in technology. We bought a HDTV two years ago that can now be purchased for a little more than half of what we paid. At the time, we really shopped around for a good price, too.

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