They say when deflation occurs, people hoard money. Not true, new electronic products inevitably get cheaper, yet people buy and buy and buy. You can wait a few years to see a new movie on TV for free, why see it now and pay the money? So what is the real impact of deflation?I think its lower corporate profits leading to lower stock market leading to lower consumer confidence etc etc? Or lower corporate profits leading to layoffs etc. Somehow I cannot accept the fact that people will anticipate prices getting cheaper--- since 1)they cannot anticipate that prices will get cheaper 2)people usually spend anyways on new stuff, which may get a 90% discount in a few months/years. I think it has more to do with the corporate/confidence. I know I wasn't too clear on this, hard to express and I'm not well versed in economics.