Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: muawiyah

I agree completely. We’re still in a deflationary cycle, since the assets were valued far beyond what the market could sustain. Once we reach a form of equilibrium and velocity picks back up - hellllllllllllllllo Zimbabwe.


15 posted on 09/02/2009 7:27:13 AM PDT by thefrankbaum (Ad maiorem Dei gloriam)
[ Post Reply | Private Reply | To 1 | View Replies ]


To: thefrankbaum
Notice, however, Zimbabwe is not now nor has it ever been distracted by real deflation.

It's not just a monetary problem ~ with goods/services on one side and specie on the other. It's a productivity problem with vast improvements distorting the "normal market" everyone expects. Deflation does not necessarily drive up the value of money (so that not all prices change ~ vegetables, for instance, are still going up compared to historic levels) which means it's not strictly a monetary phenomenon like the Jimmy Carter Stagflation proved to be.

At the same time productivity improvement is selective regarding the products/services which are going to see prices slashed, or profits increased.

Zimbabweans can only hope and pray for some deflation of either kind ~ monetarist theory or productivity theory.

19 posted on 09/02/2009 7:36:06 AM PDT by muawiyah
[ Post Reply | Private Reply | To 15 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson