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

To: PGR88
Ergo, we’d be subject to perpetual deflation.

And what's wrong with that?

You're joking, right?

Imagine your salary was $1000/month. If prices were declining - which reflected general productivity increases in the economy as more goods became available for the same money stock, then you would have RISING REAL WAGES.

Imagine your employer had to cut prices year after year after year. They need to sell more product to pay your wages. They have an incentive to reduce head count. Now your real wages are zero.

At least you have lots of equity in your house. Ooops, not so much.

54 posted on 12/05/2011 10:49:00 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
[ Post Reply | Private Reply | To 53 | View Replies ]


To: Toddsterpatriot
Imagine your employer had to cut prices year after year after year. They need to sell more product to pay your wages. They have an incentive to reduce head count. Now your real wages are zero.

In the early 1800's, the Luddites were a social movement that hated and sabotaged textile machinery, because they saw that this new equipment and technology reduced the need for the traditional textile weavers. You are looking at this through this, and the narrow prism of today's debt-delevering deflation of speculative assets, particularly housing. Companies are going bust and prices are dropping because of Bankruptcy. Why did this happen? Because Keynesian's beloved Gov't Programs and Central Bank played with interest rates and money supply to create bubbles in Tech Stocks, then Real Estate, all within 8-10 years

A non fiat currency avoids all this.

57 posted on 12/05/2011 11:50:08 AM PST by PGR88
[ Post Reply | Private Reply | To 54 | 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