For those of you enjoying the drop in prices all over the place, especially right before Christmas, I should caution you about a tricky little thing called: Deflation.
Here's a good article explaining deflation and why we should all be concerned by it.
What is it exactly?
Well, it's where prices fall. Normally, we like falling prices, but not when it's caused by large scale deflationary forces like we're seeing now.
Prices are falling because demand has fallen. Lower demand equals lower prices; it's classical economics.
Deflation is good at the beginning, so if you got the cash, spend it now on those good deals.
As deflation drags on, you see downward pressure on wages. This hurts.
Be prepared for lower wages and more unemployment if we can't shore up the economy soon. It's a nasty cycle that we can ill-afford to get into.
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