The Economy Faces Fierce Deflationary Tendencies's leading deflationists warned about deflation when it was the last thing on people's minds. Now the evidence of this rare trend is mounting.

Consider the decades-low labor force participation rate, reduced consumer spending, stagnant prices and an economy that remains feeble despite the Federal Reserve's unprecedented inflation efforts.

The chairman of an investment firm just said that the economy is "mired in a long deleveraging wave."

Five years after the economy went bust, the recovery remains propped up by central bank fiat. Demand has not returned to match supply, and economies in the developed world continue to work at levels far below capacity. ...

"The world has fierce disinflation or deflationary tendencies and we live in this world," [said] David Kotok, chairman and chief investment officer at Cumberland Advisors. ...

Despite unprecedented efforts and trillions of freshly printed money, inflation in major developing economies is actually heading lower. ... the inflation rate in the world's largest economies fell for a third straight month.

The Wall Street Journal, Dec. 9

The article also points out that U.S. consumer prices in October were up just 0.9% vs. the previous October. That's the lowest rate of inflation since 2009, when the economy was still reeling from the subprime mortgage meltdown.

The deflationary trend has only started.

See The Wall Street Journal article here.