By Tom Dyson in DailyWealth:

The Federal Reserve may be inflating our currency, but when it comes to the prices of the goods and services I use, I only see deflation.

Cheap credit is the cause. Credit's been too cheap - on and off - for the last three decades. Cheap credit caused savers to spend more than normal and entrepreneurs and businesses to borrow and build more than normal. It led to overinvestment in production and service capacity.

Last year, we reached the peak of the credit and price boom... and now prices are falling. We're in what economists call a "debt deflation."

High-quality bonds are the secret to investing in a debt deflation. As the prices of everything around you collapse, the coupon payments you receive from your high-quality bonds appear to grow.

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