Preventing Deflation

In response to a question regarding the current credit crisis with the Great Depression, Ben Bernanke offered this:

“I believe the difference today is that, you know, that we will address financial issues and try to maintain the integrity and stability of our financial system. We will not let prices fall at 10% a year. We will act as needed to keep the economy growing and stable.”

Of course, the Fed actually caused the decline in prices during the depression.

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