Tech Could Drive a Deflationary Cycle

This column was originally published on RealMoney on Oct. 27 at 1:05 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

So what of this whole deflation possibility?

The biggest potential cause of a major deflationary cycle in this economy is the very thing that has driven the virtuous cycle of economic and productivity growth during the last couple of decades: the communications and technological revolution.

Earlier this week, I highlighted some of the many ways the revolution has helped companies and individuals become ever more efficient and productive in a number of everyday tasks. The flow of information and capital has become so quick and easy, and distribution and logistics management has become so inexpensive and cost-effective that playing field after playing field is being leveled. But some of the very same technological advancements that have thus far benefited those who have leveraged them have the potential to reverse into negatives. ...