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To: spokeshave

Stagflation is stagnant output plus inflation. Not something you will see in a deflation.

In a deflation the economy will stall or go into a vicious spiral of ever declining employment and output. A negative feedback loop.


37 posted on 10/23/2014 5:54:28 PM PDT by Pelham ("This is how they do it in Mexico"- California State Motto)
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To: Pelham; spokeshave
In a deflation the economy will stall or go into a vicious spiral of ever declining employment and output. A negative feedback loop.

That's an utter myth. It's never happened in America, even pre-Fed, which is most of our economic history.

There has never been a deflation spiral in America. Prices reset, risk ratios return to order and investors re-enter the markets, many bargains make new fortunes once capital is correctly allocated.

49 posted on 10/24/2014 4:11:53 AM PDT by 1010RD (First, Do No Harm)
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