V. 20:7 (98-100): Working Money: That ’70s Show by David Penn

Working Money: That ’70s Show by David Penn

These must be confounding times for those who have spent the past five years alerting the investing public to dangers of deflation. Deflation — the process through which a currency becomes overvalued relative to goods and services available, resulting in a decline in pricing power — was the last phase of the disinflation wave that began in the early 1980s as the chronic inflation of the 1970s was finally eliminated from the US economy. Most evident in the bearish commodities markets, deflation and its discontents (increased burdens for debtors, for example) subsequently dragged down both the telecommunications and technology sectors as companies were caught between the economic “rock and a hard place” of declining prices and increasing productivity.