Quote:
Originally Posted by MTAtech
The gold standard created deflation.
|
No it doesn't. You made that up. Like when FDR SET the gold price. No different than printing money.Government is the cause of the booms and busts and the busts are always worse.
Quote:
Originally Posted by MTAtech
Why is deflation bad? Let me count the ways.
When people expect falling prices, they become less willing to spend. This buts a drag on the economy as sales fall, leading to more unemployment and more deflation.
|
We don't get into debt as much on the big ticket item and they spend their money elsewhere. We spend money. The only time we've saved as a nation was WW2 when the economy stank because there was little in the way of quality goods to purchase. Supply side economics. Keynesian are clueless on that also.
Purchasing power of the dollar is what matters.
Quote:
Originally Posted by MTAtech
Another effect is that deflation increases the burden of debts. This was particularly the case with farmers. They all had mortgages on their farms, which were fixed. However, the prices on their crops kept falling, to the point where they couldn't earn enough to pay the mortgages.
|
We are told to save money and not get into debt. Debt causes problems. Put a large down payment down on a house. We are always told that as it makes sense since its cheaper in the long run as well as the short run with lower payments. But your answer is to get in debt. Whatever you do, stay in debt and back yourself into a corner.
Same garbage the Obama administration told us on the cash for clunkers. All that happened was his cronies were helped while people got more into more debt AND the lower and middle class had less used cars, therefore they paid a higher price. Your economics tightens the noose around the working stiffs neck. Good thinking.
Quote:
Originally Posted by MTAtech
Third, since deflation causes unemployment, it puts downward pressure on wages too. So, we end up with downward price and wage pressure, while debts remain fixed resulting in a deflationary spiral with high unemployment.
|
Deflation doesn't cause unemployment and never has. You made something up and tried to pass it off. Debts remained fixed? Says who? What else are you going to try and pawn off?
Subtle deflation or subtle inflation is what the people want. AND we don't base inflation on the fraudulent CPI. We don't like swings we want to have less variables in order to make an informed decision.
Judging from your posts, I think you've been under some stress lately.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
