Money plays such an important role in our lives that most of us could not imagine surviving without it. Yet that is exactly what you need to do if you want to prepare for an economic condition called deflation. Deflation is the term economists use to describe a “general decline in prices, often caused by a reduction in the supply of money or credit.” A good way to think of deflation is as the opposite of inflation. Inflation occurs when there is too much money in circulation, which destroys its value and raises prices. When deflation occurs, there is too little money available, which often causes prices to collapse and the economy to shut down.
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