You are conflating two different things. When the price of a particular commodity drops because of increasing supplies that of course is a wonderful thing. That is not the same a deflation which is a GENERAL drop in the price of things across the economy. That is evidence that something very bad is going on in the economy.
“deflation which is a GENERAL drop in the price of things across the economy. That is evidence that something very bad is going on in the economy.”
I spoke about them both separately to show the author was confused. The author made it sound like deflation was in itself a cause of economic conditions. In his title “Is Deflation Really Bad for the Economy” and the article the author says that deflation is good for economy.
Falling prices are good for everyone. General deflation is not a cause but rather an effect of a severe economic downturn. It is a symptom of lack of demand which will lead to production being unprofitable which will lead to a downward economic cycle.
>You are conflating two different things. When the price of a particular commodity drops because of increasing supplies that of course is a wonderful thing. That is not the same a deflation which is a GENERAL drop in the price of things across the economy. That is evidence that something very bad is going on in the economy.
If your money is imaginary [that is credit] then it stands to reason that that imaginary money/credit disappearing is irrelevant to the true worth/value that you had... like the recent stock-market bubble/collapse, it only happened because so many people had bought into the idea “housing prices *never* go down” and as such they imagined upward valuation on the properties they were buying; when reality hit and stripped that imaginary [future] value they were in reality not losing a single cent of their true value.