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I genuinely do not understand how deflation could ever be a concern in the US when the fed can always fire up the printing machines.

• imtringued 6y ago
  That's true, the government (including the Fed) will do everything in their power to prevent deflation. What the Fed is doing right now isn't fighting deflation though, it's fighting something with the symptoms of deflation. A savings glut is very similar to deflation. Deflation means your money is gaining purchasing power and therefore people start saving money instead of spending. Retirement forces you to save money, no matter what, instead of spending it. Low yields/interest rates actually create pressure to save even more, which chokes the economy. If you don't spend money and keep investing then you will reach a point where you did every investment possible, because the lack of spending also eliminates further investments to be made. The excess capital is poured into existing investments like stocks and housing which causes a bubble to form. If there is a lack of due diligence (think of 2008 or over leveraged borrowers in general) and someone discovers that, then the bubble will pop. The dumb part is that there are a lot of investments to be done in real estate but nobody is building to satisfy investor demand.