Moody's, the bond rating agency, joined Standard and Poor’s and Fitch, in downgrading the bond rating of US government debt. It would seem the issuer of the reserve currency of the world, and the world’s largest economy no longer has a AAA credit rating with any of the major bond rating agencies.
So, arguably the second-largest economy in the world, China, is sliding into deflation. The third largest economy in the world, Japan, is trying to get out of deflation. A few other notable countries are starting to deflate.
With the price of everything in the grocery store soaring here in the US, could we too be headed for deflation? After recently buying some cuts of beef and filling up the gas tank, such a thought seems ridiculous.
What is deflation?
