Why Economists Fear 'Nightmare' Deflation From Cheaper Oil
Here is a very good primer article which explains why deflation is bad. People are glad now about low gasoline prices at the pump, but things are not as good as they look. Deflation will lead to higher unemployment because people will not buy big ticket items, and this will lead to layoffs in durable goods companies. Lower oil prices will bring about layoffs in the oil industry. This in turn will result in less people holding up the economy by buying things.
This situation is also why many people here and abroad are loading up on long term government bonds. Stocks like TLT, the long-term government bond ETF, and TMF can help you make money in this trend. For example, concerning TLT, you will get paid a small amount of interest each month, and you will probably have a double-digit capital gain like what happened in 2014. TMF, the 3x long-term bond ETF, will not pay much interest, but you will get a larger capital gain.
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