America’s Date with Deflation?. America’s Date with Deflation? Two years ago, at the peak of the late-1990s boom, the American economy was slightly overheated. As the unemployment rate fell to four percent and below, inflation began to creep upward, rising by between a quarter and half a percentage point each year. By late 2000 it was very clear that America’s GDP was one to two percentage points above potential output–above that level at which aggregate demand balanced aggregate supply, at least in the sense… [Semi-Daily Journal]
Economists can be so scary when they talk about this stuff. Now, add in a war against Iraq and a few more corrupt CEOs and it becomes downright nightmarish for the average investor. Maybe I should just put all my money in a mattress?