Is deflation a real threat?

[Praveen Kumar]

How will deflation affect the property market and what should an investor do if it does brew its ugly head?

Why are economists talking about deflation when so much money is being printed by governments all over the world in order to revive the world economy?

The burst of the housing bubble has created wealth effect in reverse. People can no longer use their homes equity as ATMs by taking out lines of credit or refinances their homes to fuel consumption. The reduction in equity is destroying wealth at a much faster rate than any money supply that governments are pumping into the economy. This is creating a very powerful deflationary pressure.

Deflation is much worse than inflation for property investors. I will appreciate some views on the subject as it is very current.

Praveen Kumar