There is much discussion going on about the state of the economy, or the State of The Union if you will. Some economists argue that we are entering a deflationary cycle – like Japan’s ‘‘lost decade” of the 1990’s. Others believe that the U.S. economy is headed straight into high inflation. Either way, it is likely that this transitional phase is going to be quite a rough patch.
How are deflation, inflation and permanently high unemployment linked to each other? For starters…