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Debate House Prices
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CPI hits 4.4pct
Comments
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I would not mind a little deflation now.
You may get your wish. Let's just see how global events pan out. The last time people were wailing about high inflation it was rapidly followed by a banking crisis and deflation. There's another one on the horizon across the channel, sooner or later.0 -
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What is so bad about deflation?
Cheaper food, Cheaper housing, Cheaper transport, don't sound that awful.0 -
Degenerate wrote: »The global outlook was clearly deflationary.
It still might be.0 -
What is so bad about deflation?
It risks creating a self-reinforcing feedback loop that is devastating to the economy. Look up "deflationary spiral" and do some research on the Great Depression. I'm not wasting my time talking you through the details, I know what it's like trying to debate with you.0 -
Degenerate wrote: »It risks creating a self-reinforcing feedback loop that is devastating to the economy. Look up "deflationary spiral" and do some research on the Great Depression. I'm not wasting my time talking you through the details, I know what it's like trying to debate with you.
Obvoiusly there are downsides, but I believe much of the deflation in the great depression was a symptom of protectionism, rather than a cause.
I would also suggest that on balance, an inflationary spiral is worse than a deflationary spiral.0 -
I would also suggest that on balance, an inflationary spiral is worse than a deflationary spiral.
Positive inflation can't spiral out of control like deflation can. Something has to be feeding an increase in money supply for major inflation to happen, either the government by increasing base money or the banking sector by lending more and more. Money supply isn't increasing. They're still having to push the banks to lend more.0 -
Obvoiusly there are downsides, but I believe much of the deflation in the great depression was a symptom of protectionism, rather than a cause.
I would also suggest that on balance, an inflationary spiral is worse than a deflationary spiral.
Both are bad IMO.
Japan's period of deflation has coincided with greater opportunities for trade rather than protectionism.0 -
What is so bad about deflation?
Cheaper food, Cheaper housing, Cheaper transport, don't sound that awful.
Smaller pay packet, while your debt burden stays the same.
You just don't get it do you ?
Do a forum search on user Dopester who posts some interesting stuff on the destructive power of deflation0
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