Why is deflation bad?

[Anonymous No.56846011]

[Anonymous No.56846015]

flat tires don't roll

[Anonymous No.56846017]

>>56846011
no spend, no jobs; no jobs, no goods; no goods, no hope; no hope -> extreme violence

[Anonymous No.56846020]

>>56846011
businesses lose pricing power and are forced to aggressively fire employees to avoid bankruptcy which has a cascading effect on the economy. nobody is safe. exit all markets

[Anonymous No.56846022]

It's not. It's literally how the working class gets richer.
Don't listen to keynesian/mainstream economists who tell you it caused the great depression.
Their policies caused the great depression.

[Anonymous No.56846030]

>>56846020
Their capital costs come down significantly, negating these price decreases

[Anonymous No.56846048]

>>56846011
Inflation fetishists will be sad

[Anonymous No.56846049]

>>56846011
There won't be much incentive to businesses getting loans and the way we think about it today, is that loans drive up employment and production.

[Anonymous No.56846050]

>>56846030
you have no idea what you are talking about

[Anonymous No.56846051]

>>56846022
I dunno bud, the depression happened during deflationary policy and every recession since has happened because of monetary tightening
>>56846030
their costs don't drop when the just-in-time economy no longer has materials to feed it

[Anonymous No.56846057]

>>56846011
It isn't. It is bankers and the government which decide the economic theories which are considered correct. They select the ones which serve their interests and gaslights the public. If you didn't think you were going to die from covid if you did not get triple jabbed and wear a cloth mask while hiking, then you shouldn't believe lower prices is bad for you and your community.

[Anonymous No.56846079]

>>56846011
Companies usually have debt which is in some fixed value. Companies also have contracts with employees to pay some fixed rate, since few people would take a job where they can just change your wage in a few days or weeks. A third reason is that companies try to charge as much as possible, so if there is a deflation for a contraction in the money supply, it wouldnt pull down prices equally among all the economy, since companies would try to keep the prices high as long as possible.

This means that, as deflation kicks in, the debt company owns increases. But they revenue goes down. At first they would try to keep prices up but as competition starts to lower the prices they are forced to do so to remain in the market. As their debt increases (since the value of it goes up) they cannot pay their employees less due to contracts, so they need to fire them.

Unemployment would go up, and since unemployed people don't spend as much money as people will job, this would push deflation even further, and companies would need to fire more and more people, producing less products, all the while getting less revenue and with a perpetually increasing debt. Eventually the companies crash.

This is why deflation is bad, basically.

[Anonymous No.56846092]

>>56846030
Debt and wages remain usually fixed, those are the two greatest problems with deflation. Under deflation, debt goes up, and wages cannot be decreased due to contracts, forcing companies to fire people to pay the debt. But as they fire people, they produce less since they dont have much manpower.

[Anonymous No.56846095]

>>56846011
because jews said so
Inflation good tho, goy

[Anonymous No.56846106]

>>56846017
>no spend
stopped you right there. Companies aren't entitled to your money. That AND the whole "inflation devalues your money so you're more likely to spend it" is both unethically jewish (manipulative) and not even true (besides with investments i.e. flee the currency to buy an asset that will outpace it i.e. bitcoin).
>>56846020
based. Companies that can't make it on their own don't deserve survival in the first place

[Anonymous No.56846114]

>>56846011
inflation is healthy longterm and unavoidable
deflation isn't possible
disinflation is good in situations like we are in right now

[Anonymous No.56846117]

>>56846011
its only bad for people that make money without producing anything.

[Anonymous No.56846125]

>>56846114
inflation is never healthy. That's propaganda that was fed to you. It's what causes cost of living to outpace income which causes 99% of the problems in a society

[Anonymous No.56846150]

>>56846011
because, because it just IS, okay? UGH, i know!! hahahahaha..

[Anonymous No.56846169]

>>56846050
Read Mises Read Rothbard

>>56846051
>I dunno bud, the depression happened during deflationary policy
The 1929s was inflationary. The depression was caused by interventionist government policy as a result of the crash they created.
>no longer has materials to feed it
Why would they no longer have materials? Prices have come down, there should be more materials.

>>56846092
>Debt and wages remain usually fixed
In a deflationary economy, businesses would put in their contracts to adjust debt with deflation.
>and wages cannot be decreased due to contracts, forcing companies to fire people to pay the debt. But as they fire people, they produce less since they dont have much manpower.
Yes there will be an equilibrium.

[Anonymous No.56846173]

>>56846114
>deflation isn't possible
Why why did it exist for decades prior to the creation of the federal reserve?
Why did we have the industrial revolution during a period of deflation?

[Anonymous No.56846190]

>>56846173
>industrial revolution
>supply increases, demand can't keep up
>price decreases

[Anonymous No.56846207]

>>56846169
>In a deflationary economy, businesses would put in their contracts to adjust debt with deflation

Can't be done due to the third problem: not all prices would go down at the same time. Essentially you are asking for workers to have their wages decrease nominally, all the while the prices wouldnt go down as quickly as them (due to again, contract between companies and because companies would keep the prices as high as possible for the longest time). So essentially its a contract where your wages can do down both nominally and practically (since your wage will go down but many products will remain high for a longer period). No one would accept such a job, and the job market would be absorbed by companies that offer a fixed wage.

>Yes there will be an equilibrium

No such equilibrium would be achieved because as you fire people, you produce less, your debt increases and you need to fire more people to pay the debt, but as you fire you produce less so you get less money and the cycle becomes a spiral.

[Anonymous No.56846219]

>>56846173
>industrial revolution
You mean during the Long Depression?

https://en.m.wikipedia.org/wiki/Long_Depression

"The Long Depression was a worldwide price and economic recession, beginning in 1873 and running either through March 1879, or 1896, depending on the metrics used.[1] It was most severe in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution in the decade following the American Civil War. The episode was labeled the "Great Depression" at the time, and it held that designation until the Great Depression of the 1930s. Though it marked a period of general deflation and a general contraction, it did not have the severe economic retrogression of the Great Depression.[2]"

[Anonymous No.56846222]

>>56846011
It just is, alright? Geez.

[Anonymous No.56846237]

>>56846190
Yes, price decreases.
Problem?
>>56846207
>Essentially you are asking for workers to have their wages decrease nominally, all the while the prices wouldnt go down as quickly as them (due to again, contract between companies and because companies would keep the prices as high as possible for the longest time).
Why is this a problem?

>So essentially its a contract where your wages can do down both nominally and practically (since your wage will go down but many products will remain high for a longer period). No one would accept such a job, and the job market would be absorbed by companies that offer a fixed wage.
It's pretty funny that america thrived with a deflationary economy for many decades and we didn't have these problems you came up with.

>>56846219
Long depression was a myth.
https://cdn.mises.org/The%20Depression%20of%201873%20to%201879%20An%20Austrian%20Perspective-1.pdf

Wages increased while prices fell throughout this period.

[Anonymous No.56846242]

>>56846011
The Jews will make less shekels and that is bad for goys

[Anonymous No.56846261]

>>56846011
Its bad for the government and asset holders.

[Anonymous No.56846268]

>>56846237
I was just answering you why there was deflation
think of it logically
if there's endless jobs and endless supply then demand will naturally plummet, resulting in deflation (not disinflation), but this is very rare and sure enough inflation happens 9 times out of 10

[Anonymous No.56846360]

>>56846237
>Why is this a problem?
Many reasons. First one is that employees also have debts that would go up as deflation kicks, but their wages would be going down nominally, making it harder for them to pay it. Second, since not all prices would go down at the same time, they will get less paid due to their wages being adjusted by deflation while also paying more in the non-adjusted commodities. Its a pretty shit deal.

>It's pretty funny that america thrived with a deflationary economy for many decades and we didn't have these problems you came up with

There was a massive depression Anon wtf are you talking about.

>Long depression was a myth
Mises article says there was a recession in 1873 to 1875 and then economy rebound since GNP went up. This ignores two facts, first, while GNP did went up there was a massive contraction in the economy since the rate of growth got massively undercut, mostly due to a rise in unemployment (that peaked to 8.25% in 1878). The wiki article explains it well:

"The U.S.National Bureau of Economic Researchdates the contraction following the panic as lasting from October 1873 to March 1879. At 65 months, it is the longest-lasting contraction identified by the NBER, eclipsing the Great Depression's 43 months of contraction.[5][6]In the United States, from 1873 to 1879, 18,000 businesses went bankrupt, including 89 railroads.[7]Unemployment peaked in 1878 at 8.25%.[8]"

US growth rate was 6.2% from 1850 to 1873 but from 1890 to 1913 it was 5.3%.

Basically, it happened exactly what it was expected: deflation kicked, prices went dont, unemployment rose, and growth went down.

[Anonymous No.56846368]

>>56846011
Its not. I'd rather live in japan today than america.

[Anonymous No.56846378]

>>56846360
>First one is that employees also have debts that would go up as deflation kicks,
There would be much less debt in this kind of system and much more savings.
People who get loans would have adjust for deflation clauses in their contracts.
>they will get less paid due to their wages being adjusted by deflation
Wages get adjusted LAST, this is beneficial for workers in deflation.
>There was a massive depression
It was basically a myth.
Even if it was true, for many many decades we had double digit growth and massive increases in living standards for workers.

>growth went down.
It barely went down. Those rates are insanely high compared to today.

[Anonymous No.56846412]

>>56846378
>>56846378
>There would be much less debt in this kind of system and much more savings
I mean you could try to curve the generation of inflation through debt (which creates "money" in the form of "to pay" forms of cash) by generating a totalitarian goverment that would forbid private banks from doing this, and even private companies to lend money between themselves through credit. Not exactly a very free society, but you could do that.

That would certainly eliminate that problem, but you would be crippling your entire economy by making it several times more slow for people to make any entrepenurship or setting their own companies and factories, if you are willing to impose such a totalitarian state of control on personal freedom and also make the economy take a massive dip as growth goes down, be my guest. But it sounds like a pretty shit deal.

>People who get loans would have adjust for deflation clauses in their contracts
Why the fuck would a bank or a private give you a loan in a deflationary economy? They are losing money, since they are lending you money and as deflation kicks in the adjusting rate means you need to pay them less nominally (so say they lend you 1000, and as deflation kicks, you now own them 900). They make more money simply sitting on the money and letting deflation make it more valuable. Meaning only reason to give a loan is by increasing the interest rate to compensate for deflation, which doesnt sit well if your wages are going down. Its a shit deal.

>Wages get adjusted LAST, this is beneficial for workers in deflation

There is no "last". You cannot predict when sticky prices will un-stick. You are basically saying someone "hey dude we dont know how much you will get paid end of month but we pinky promise we will try to eyeball it as well as we can". Shit deal again.

[Anonymous No.56846418]

>>56846378
>Even if it was true, for many many decades we had double digit growth and massive increases in living standards for workers

You may call it a myth but the numbers dont lie. Increased unemployment and a massive economic global contraction in growth happened. And sure, living conditions improved but that was in spite of the Long Depression, not due to it.

>It barely went down. Those rates are insanely high compared to today
It's not that the growth wasnt big, any country industrializing has big numbers that naturally go down as they get developed, its the massive nosedive between years that was a recession. You niggers would be crying if we suddenly nosedived that way and would be calling for the fall of the west.

[Anonymous No.56846516]

>pure dumbfuckery on this thread
first what will happen is CPI remains elevated because of the energy crisis caused by all the wars while it is the asset class that will deflate, it's also called bubble bursts or market crash
since banks' assets are leveraged they will be deflated into worthlessness (ryan gosling scene in the big short "they're going to ZEROOOO") it means the banks have toxic balance sheet / insolvent, they can't make new loan, no new money entering economy means great depression on the main street
great depression didn't happen in 2008 because of QE
>they will brrrr again
it's not that simple....

[Anonymous No.56846895]

>>56846011
Because jews wouldn't be able to hyperinflate us into interest bearing servitude.

[Anonymous No.56846899]

>>56846011
The price of everything relative to bitcoin has been deflating for 15 years.

[Anonymous No.56846914]

>>56846011
They will say it is because sitting on cash makes you richer, leading to less investing and more inequality. The real answer is that higher productivity is deflationary and deflation would allow everyone to benefit from it, whereas siphoning it off with inflation the benefits goes first to banks, then to investors and the wagies/poor get inflation trailing raises to try and keep up. Inflation promotes investment because it forces investment.

[Anonymous No.56848487]

>>56846011
Harsh for people who owe debt, so for most people in the USA.

[Anonymous No.56848500]

>deflation bad

its only bad to those who can borrow from a central bank at .25% and lend at .3%

to regular everyday jackasses, the idea of your dollars purchasing power is a good thing as it BTFOs internet/fake money (mostly the derivatives)

[Anonymous No.56848504]

>>56846051
>always happenned in deflationary periods

ya, when the government is forced to stop interfering with markets and the market corrects. somehow a correction in the markets is a sign of policy failure lmfao

[Anonymous No.56848508]

>>56846057
Cool it with the antisemitism

[Anonymous No.56848522]

>>56846057
/thread

[Anonymous No.56848537]

>>56846017
Most people don’t understand inflation enough for it to have any effect on their spending. People will literally always buy shit just because they want it. People take on credit card debt and pay like 20% interest on shit for that exact reason. Most people are to retarded to understand any of this.

[Anonymous No.56848714]

>>56846011
because with deflation everyone can make money just by holding cash and saving and the jews can't allow that

[Anonymous No.56848728]

>>56846011
Very antisemitic question anon, I will call the ADL and my local rabbi immediately.

[Anonymous No.56848744]

>>56846011

It's not.

[Anonymous No.56848807]

If you believe the value of the currency today will be less than the value tomorrow, why would you spend it today? It's why Bitcoin isn't useful as a currency.

[Anonymous No.56848925]

>>56848807
>people will never spend any money on anything because their money will gain more value in the future
So people won't eat food, buy technology etc?
Wrong.

People know they can make money in the stock market yet they dont throw all of their money into it. They actually buy shit to consume

[Anonymous No.56848963]

>>56846049
How does being in debt and paying back borrowed money plus interest get anyone ahead?

[Anonymous No.56849003]

deflation (money supply shrinking) means dollars are increasing in value against goods and services which promotes saving over spending. businesses rely on spending to stay in business and if everyone is saving they have to "trim the fat" and let go of employees they don't absolutely need. those newly let go employees will drastically reduce their spending since not only did they lose their job but it becomes impossible to find a new one companies only downsizing. this compounds the problem creating a cascading effect of job loses and eventually selling goods/services at lower prices in hopes to get people to spend money to keep the business alive.

[Anonymous No.56849056]

>>56846057
banks like deflation

[Anonymous No.56849133]

>>56849003
imagine being a brainwashed keynesian retard

deflation wouldnt mean all spending is reduced, just some
this is good, we need people to have more savings

[Anonymous No.56850001]

>>56846011
The deception the technocratic central planners have employed is to obfuscate monetary inflation/deflation with market forces due to supply/demand changes or technological innovation. Monetary deflation is harmful in that there is a lack of currency to conduct business. Market-force deflation is beneficial as a signal of abundance due to excess supply or productive innovation.

Consider a hypothetical perfectly elastic monetary base which had the ideal amount of currency for a given population and its changing demographics. Any price fluctuations would be purely due to supply/demand factors and technological change. When someone innovates, it creates efficiency which produces surplus productivity and generates value. In this ideal monetary scenario, deflation is the natural result of the cumulative effect of time spent thinking and innovating.

Deflationary growth allows savings to become more valuable and free up capital for investment. It enables the industrious to become independent and prosperous. No insividual is harmed by the cost of living going down. No business is harmed by the cost of material inputs dropping and being able to further scale their processes.

It is this obfuscation of monetary deflation, which constructs the supply of currency to the point where trade is artificially choked and potential value generation destroyed, and deflationary growth through value-positive innovation, that enables tehcnocratic central planning to necessitate their continued existence and policy of excess currency creation to bestow to their chosen insiders who may benefit from it before the inflationary impacts reduce the newly crested currency's value.

[Anonymous No.56850156]

>>56850001
best post in this thread