Short history lesson on inflation, deflation, and how they relate to the health of the economy

   As stated in a previous article, inflation is often accompanied with strong economic growth, while deflation is accompanied with a very unhealthy economy.

  The first world war pumped so much fiat money into the american economy that it later created the roaring 20s. The value of the dollar plummeted during that great economic era. When that injection was finally spent, 1929 led to the great depression. The dollar strengthened to levels that had not been seen in decades. But at the cost of 24 percent unemployment.

United States Unemployment Rate

Here's a look at the U.S. unemployment rate for selected years from 1920 to 2008.

Year	Rate
1920	5.2 %
1928	4.2
1930	8.7
1932	23.6
1934	21.7
1936	16.9
1938	19.0
1940	14.6
1942	4.7%
1944	1.2
1946	3.9
1948	3.8
1950	5.3
1952	3.0
1954	5.5

Read more: United States Unemployment Rate 1920–2008 — Infoplease.com http://www.infoplease.com/ipa/A0104719.html#ixzz14SZguKZS 

  As the government recklessly poured money into the economy whether it was to build infrastructure or to build bombs, the unemployment rate dropped while the dollar became the main casualty. And when the economy crumbled causing massive layoffs, the biggest winner was always the dollar.