Why we don't need to worry about deflation

With the current depression, there’s been some fear that we may enter a period of deflation, which could create a downward spiral for the economy as people hold off on spending and debt becomes crushing. But after opening today’s mail I’m a little less worried.

Why?

Well it’s annual renewal time for the boutique consulting firm I run. This year’s premium increase is a hearty 11.6 percent. This comes on top of increases in recent years of 13.3 percent, 26.3 percent increase and 11 percent. Thanks to the magic of compounding that means our premium costs have risen by more than 77 percent over four years! And we were not starting from a low base either.

When I wrote about last year’s increase, I asked Wal-Mart for some help. Maybe they will come through.

July 2, 2009

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