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Wednesday, August 18, 2010

Early deflation indicator, part II

I regret an omission in my last post: I did not explicitly link Iceland's decline in inflation with possible deflation.

A rapid drop in the inflation rate may be a harbinger of deflation to come, but, as the ancient Chinese philosophers said, "Here comes the fun part." We'll just have to see.

My stellar typing skills initially rendered deflation as "dedflation". Now that I think about it, that may be a good, concise description of its effect.

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