Economic Smack-Down: Inflation vs. Deflation

By: Jill Schlesinger
Topics: Financial Decoder

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

In today's "Reality Check" (Click here to view the video) MoneyWatch Editor-in-Chief Eric Schurenberg and I discussed the economic smack-down of the moment: inflation vs. deflation.

Although most economists understand that a recession, especially one highlighted by significant deleveraging, is deflationary, the worry is that the massive government spending spree (trillions of dollars since Lehman's collapse) will lead to higher inflation down the line.

Perhaps one of the reasons that investors are stymied right now is that they are unsure which is the more likely outcome. Not to put too much pressure on all of us, but waves of inflation and deflation can last for many decades, so we'll be revisiting the battle in the weeks and months to come.

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(CBS)

Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

Jill Schlesinger
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Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
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by HiTor15 November 25, 2009 12:09 PM EST: Hey this is a good article...it tries to tell the truth....Bernanke is trying to inflate his way out of the depression, but of course that will have consequences...in effect what he is doing today, is no different than what Greenspan was doing in 1999...he inflating wildly...now we just have to wait for the bubble to burst again....no solution...none at all...horrific how our nation has degenerated since the Clinton years.; Reply to this comment