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To: USFRIENDINVICTORIA

Deflation resolves itself and has done so historically. What we’re seeing via Central Banks is fascism - government management over the economy. They’ll fail at this.

Also, we need to consider that you can have a very healthy economy with persistent deflation. This would be an economy with a robust entrepreneurial marketplace and continuing growth in productivity that outpaces the population growth. This would be Nirvana and would look like the US in the 1800s, pre-progressivism.


90 posted on 10/27/2013 6:12:15 PM PDT by 1010RD (First, Do No Harm)
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To: 1010RD

Recent history bears out what you say in your second paragraph. For decades, we have had so much deflation in the tech sector that it has overwhelmed any inflation in other sectors. For instance, while the housing bubble was inflating, there was little evidence of inflation in the economy as a whole.

All I was trying to do was point out that many (perhaps most) economists have been wringing their hands about deflation for about 20 years now. The majority of economists have advocated a small amount of inflation for many decades. For the author to suggest that this is in any way new, or surprising, is a measure of some combination of: incredible ignorance; astounding stupidity, or willful bias.

BTW, IMHO, inflation does have one important use — it allows for the gradual adjustment of wage rates, to reflect changes in the real economy. Workers (and especially unionized workers) don’t mind wage increases; but, they hate wage cuts (Duh!). Inflation provides the smoke and mirrors that allow for gradual wage cuts, while giving the illusion of wage increases. Most text books on the subject stress this point — although I doubt the article writer has ever cracked an economics text.


104 posted on 10/28/2013 11:32:38 AM PDT by USFRIENDINVICTORIA
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To: 1010RD
Deflation resolves itself and has done so historically.

Wait a sec, so does Disco, nuke war, and hot fudge steak sauce, but it doesn't mean we still don't want to avoid them...

106 posted on 10/29/2013 4:38:54 AM PDT by expat_panama
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