This deflation from the bumpy COVID, supply chain, and corporate greed is good. But sustained long term deflation is very bad. The easiest way to explain it is basically everything runs on debt. If your revenue keeps going down but your debt is fixed, your debt effectively grows and the company is fucked. Same thing on a personal level if your wages go down and your mortgage is fixed.
Even without debt, sustained deflation is a sign the economy went to shit. Prices go down when there’s no one buying, if there’s no one buying companies close, people lose jobs, which causes other companies to go bankrupt and so on. Debt is the icing on the cake. People that think that long term deflation and deflationary policies are good never went through one.
Yeah, inflation is kinda good way to incentivise getting loans and mortgages as early as possible because you know that you’ll never be able to save that much money as they get cheaper and cheaper. So, does everything run on debt when there is inflation, too?
This deflation from the bumpy COVID, supply chain, and corporate greed is good. But sustained long term deflation is very bad. The easiest way to explain it is basically everything runs on debt. If your revenue keeps going down but your debt is fixed, your debt effectively grows and the company is fucked. Same thing on a personal level if your wages go down and your mortgage is fixed.
Even without debt, sustained deflation is a sign the economy went to shit. Prices go down when there’s no one buying, if there’s no one buying companies close, people lose jobs, which causes other companies to go bankrupt and so on. Debt is the icing on the cake. People that think that long term deflation and deflationary policies are good never went through one.
The Apple II sold for $1298 in 1977. You can buy a mac mini for $599 today. Deflation is real in some markets and we are just fine.
Keyword in some markets. And in that case driven by efficiency increases in comparison with the rest of the economy.
Yeah, inflation is kinda good way to incentivise getting loans and mortgages as early as possible because you know that you’ll never be able to save that much money as they get cheaper and cheaper. So, does everything run on debt when there is inflation, too?