Deflation Is the New Inflation

The deflation scare in Japan is all over the news these days. It seems that deflation is in, inflation is out.

Not only are prices decreasing by record rates, but unemployment is falling as well!  Boy, I am so close to packing up my stuff and moving to Japan. Economists don't share my enthusiasm, however. Articles such as this one in Business Week for instance, elaborate on the present danger facing most central banks in developed countries in the Northern hemisphere. Never in my wildest dreams, have I ever pictured falling prices as a phenomenon to be dreaded, feared and fixed. Not that I don't see the very clear point economic theorists make, but I can't seem to be able to turn my back on my inflationary childhood and adolescence.

Just to clarify what I mean, take the Soviet satellites with the traumatic communist and post-communist experiences with their "governments in transition," an endless and seemingly futile history of transition consisting mostly of fighting inflation. Even while residing in the United States, and especially during the recent recession, the Obama administration stimulus plan caused even more worries about hyperinflation and stagflation. Yet, printing money didn't even cause the much-publicized anticipated inflation, let alone help fight deflation. When merely pumping money into the economy doesn't quite have the predicted results, isn't it time to turn to other panaceas?