Coping with deflation

The consumer is kicking himself for getting so far in debt and he has begun hoarding a few dollars in the hope his savings will pile up fast enough to help him out of his financial troubles. If the principal on his mortgage is greater than the declining value of his house he prays the government will bail him out. Forget that the U.S. Constitution ties the hands of government in such matters. In a time of serious trouble, though, who wants to be bothered with an old-fashioned constitution? Certainly not Congress, the Administration, or the courts.

Right now the signals are flashing "deflation." That's always the eventual payoff after a long economic boom fueled mainly by debt. Consumers are forced to cut down on their demands. Businesses cut back on their operations. Some go out of business entirely for lack of consumer support. This shrinkage leads to an increase in bankruptcies, and the bankruptcies trigger more dominoes to fall as the economy spirals down into a deflationary depression. But all this pain is necessary to clear away the trash accumulated during the years of false prosperity created by debt, both private and public.

Potiphar Gride, the staff curmudgeon on Wrisley.com, offers us advice on dealing with deflation. Deflation? What's that? The media is warning us about inflation. What to do?