[ConservativeMind]

https://www.investopedia.com/articles/markets/111715/can-deflation-be-good.asp

[HangnJudge]

brought to you by the Liquidity Trap, with lovely black swan

one classic way to end the trap is massive asset deflation, including gold/silver, don’t hold your breath for a bottom

Buckle up bucko, it’s going to be a bumpy ride

12 years old and growing, maybe 40 yrs (Reaganomics)
The Gigantic Sucking Sound is the Capital Destruction of the Western World Economies

[mulligan]

Another question,is inflation good?

[nevermorelenore]

The plot of the Luciferian Left !!!

https://canadafreepress.com/

[ConservativeInPA]

I would venture to say deflation, and inflation for that matter are neither good nor bad. It all depends if wages follow and if the inflation or deflation is spread across all goods in an economy. Deflation would be good for consumers if their wages held steady or increased, although that would not necessarily good for employers unless productivity increased to compensate for stable/increasing wages. This assumes all other inputs into business deflate at a corresponding rate as what the business produces. Inflation can be good if you have assets that are increasing in value, e.g. a home, and if your wages keep up with inflation. Inflation can be bad if you wages don't keep up with inflation and you can no longer afford to buy certain goods. Inevitably, the price of all goods will not deflate or inflate equally. So it could be said inflation and deflation are both bad and stable prices are good.

I tried my best to sound like an economist that always hedges everything he says.

[An.American.Expatriate]

The article is 100% BS. I have lived here for over 20 years and the cost of living has NEVER decreased.

Sure, officially we have had a few years where “costs” supposedly went down - but that was done via tricks. The most notable being the composition of the “shopping cart” used as a bench mark - replacing pork for beef and chicken for pork being the main example. IOW if I bought the same things today as I did several years ago, I would pay significantly more.

Another major factor is the disparity of prices between Switzerland and it’s neighbors, partially due to the exchange rate (CHF - EUR). A vast majority of the citizens here do their shopping in Germany or France where prices for the exact same product are between 20 and 50% cheaper AND the VAT is refunded (note Germany has a 20% VAT). This puts downward pressure on prices in Switzerland, but not enough to offset.

Here one quick example:

Coop Switzerland, 1 kg Hot dogs (Wiener) - 16,75 CHF / 15,78 EUR / $16,98 ($7,71 / Pound)
Edeka Germany, 1 kg Hot dogs - 7,32 CHF / 6,90 EUR / $7,42 ($3,37 / Pound) [the price in EUR is even cheaper as the 20% VAT is refunded which makes it 5,75 EUR!)

[BfloGuy]

Deflation is considered a bad thing because, in modern times, it has almost always been the result of a central- bank-induced recession. It's associated with bad times.

But the flip side of deflation is that it means the currency is getting stronger -- it purchases more.

The idea that we need some inflation to maintain economic growth is utter nonsense.

[Vermont Lt]

Well, I guess if you want the national economies of the world to go bankrupt...

The FED bases its mechanics on a 2% inflation rate. That way, in theory, the 30 year bond is paid for with money worth half of what they borrowed.

In a deflationary scenario, they are paying that money back with money worth more than what they borrowed. It is a losing proposition.

To make this worthwile, you would need to hoard cash, and that cash would have to remain “legal.” In a true deflationary crash, they would issue new currency based on a ratio of the old. Your hoarded currency would become worthless.

Even gold would lose its “value” to the dollar. Case in point: It was worth $1,700 last week (or so) and today its worth $1,500. The ONLY difference is that countries are scrambling to get dollars to pay off their dollar denominated debt. This drives the dollar index higher...and everything else lower.

I have seen the impact on gas. But on any domestically produced product you will not see any difference. You might see some on imports—but since everyone is shut down...you wont see that either.

[aMorePerfectUnion]

No. If you have severe deflation, you will pray for inflation.

[PGR88]

We’ve had deflation in computer and video products for the last 20 years. Compare your first Intel 286 computer which cost $3000 in 1989 to your $800 iPhone.

[central_va]

What we need is wage inflation. We need to stop immigration, raise import tariffs and make everything here.

[Berosus]

I have never experienced deflation in my lifetime, and I’m no spring chicken. We might as well try it now.