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Sunday, December 28, 2008

Deflationary Times - Cool Personal Checks

By Carol Zulof

People are often confused about the economic conditions they find themselves. Everything has a cool check about label, and the extremes are that either we are living in inflationary times or a period of deflation.

Deflationary times means it costs less to buy goods and services. The purchasing power of the dollar increases and is able to buy more.

Opposite of inflation is deflation and with deflation, most assets decline in value. You see the level of value of your home decline in value as well as gasoline. Corporate equities, mutual fund shares, insurances and pension reserves and equity in non corporate business decline.

The value of the U.S. dollar goes up in a deflationary environment. Quite the opposite of an inflationary environment.

Along with deflation, the buck value goes up. Its value goes up against foreign currencies. The buck buys more.

Review the level of value of your personal purchases. Are you getting more for you money? Is gas costing less, can you buy more home than you used to, are you getting better deals in the stores? Dollar credit is drying up and the value of the dollar is going up across the world.

If you see your dollar buying more, it means the guage of value of the dollar is increasing. The United States Dollar increases against foreign currencies as a market basket of value and it also buys more goods and services as a whole abroad.

The coolest, cool personal checks for the safest place to have you money in deflationary times in Treasury bills. The least ugly investment worldwide is U.S. currency.

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