Do you want higher or lower interest rates?

[Seeking_Alpha]

Originally Posted by york weir

Can you expand upon why deflation is bad?

For a business:
Prices fall--> incomes fall, but debts remain the same...

For your average homeowner:
Deflation is whats happening to the housing market, and look at the trouble that's causing. People start having negative equity positions because the liabilities don't change even if the assets are collapsing.

For a worker:
Wage (the price of labor) falls but his credit card debt doesn't

Basically deflation makes it harder for borrowers to pay back debt.

A perfect world would have low, stable and predictable inflation.