Pretty much everyone hates inflation, and there's little wonder why. Nobody likes paying higher prices for goods and services (even as inflation actually reduces the burden of debt). Deflation, on the other hand, has instant emotional appeal. After all, who doesn't like a bargain? But deflation is a far more serious economic problem than inflation -- and most folks don't really know why. Gary Shilling, president of economic consulting firm A. Gary Shilling & Co. and author of the just-published The Age of Deleveraging, explains why falling prices are indeed scarier than rising prices.

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