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Ze, 'Ow you say, Deflation Watch. Eurozone edition
Comments
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What's not true? I never said that deflation hadn't happened at any other time anywhere else in the world.
Another argument entirely.
I think you need to expand your knowledge of economics. Try the following article for starters - http://eh.net/encyclopedia/article/siklos.deflation
You said the only period of deflation anyone remembers is the great depression. That is wrong.
Bluntly, I don't think it is worth wasting my time further with you if you do not understand that current monetary policy has very largely been based around the japanese, sweedish and argentine crises and has little to do with the great depression.
Monetary policy is basically to avoid becoming Japan.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Surely deflation caused by a supply glut in such things as energy, should be a good thing for an economy? (Unless much of your economy comes from oil say)
It does appear tha teh "deflation" caused by fracking in the US has done them a power fo good.
I'd have thought so.Graham_Devon wrote: »...What I would like to know is what specifically, for us lot, the people on the street, is so bad about deflation? ...
I think the answer is, it depends on why you've got deflation in the first place. And I'd qualify that by saying that even where deflation is bad, it's not bad for everyone. Even during the 1930s a lot of people benefited. If you had a job, and kept a job, falling prices made you better off.0 -
You said the only period of deflation anyone remembers is the great depression. That is wrong....
Whereas policy makers today speak of the need to avoid deflation their assessment is colored by the experience of the bad deflation of the 1930s
Pierre L. Siklos, Professor (Economics) & Director, Viessmann European Research Centre (VERC)
That's all I was saying....Bluntly, I don't think it is worth wasting my time further with you if you do not understand that current monetary policy has very largely been based around the japanese, sweedish and argentine crises and has little to do with the great depression.
Monetary policy is basically to avoid becoming Japan.
All I said "deflation isn't all bad". I really have upset you haven't I?0 -
Whereas policy makers today speak of the need to avoid deflation their assessment is colored by the experience of the bad deflation of the 1930s
Pierre L. Siklos, Professor (Economics) & Director, Viessmann European Research Centre (VERC)
That's all I was saying.
All I said "deflation isn't all bad". I really have upset you haven't I?
To clarify, you haven't upset me at all, but I don't like to waste my time either.
As far as I know, before Japan most economists thought deflation impossible in a modern monetary system. The great depression happened in an environment entirely different to today. It isn't actually a very useful case study.
If we were on a gold standard with fractional reserve lending and small banks it would be useful.
Edit: Just to clarify "computer price deflation" is not actually deflation. Deflation is an increase in the value of money over an entire economy.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Your French accent's a bit off, Gen....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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Graham_Devon wrote: »How will it effect my food bill? My mortgage? My water bill? My wages? I'm not so much interested in how it may effect a business or landlord drowing in debt.It would be difficult to use the scare tactic scenarios from history, as others have been ridiculed for doing that the other way round regarding inflation.
The likely effect is that demand for your services reduces as customers defer purchases. There will be downwards pressure on your wages. Your mortgage debt may well increase in real terms. We know wages can increase by less than inflation - reckon it's possible that your wages fall quicker than deflation too?
I suspect that whether there's inflation or deflation the usual suspects will continue to think they've been hard done to.0 -
Not in real terms. If the cash is in the mattress, spend it. If the cash is inflation-linked, no rush. If we've got an income that rises faster than prices, the conservatory will seem more affordable later, even with a bigger price tag.Automatically I assume in the thought process that if I wait 5 years the conservatory will be more expensive.
Deflation doesn't have us all sat here rubbing our hands with glee at the thought that everything will be cheaper. We're expecting things to be less affordable even if the number on the price tag is smaller. If we aren't buying, it's because we're afraid that more important things will also become less affordable.What if I expected the price of that conservatory to be cheaper in five years? I'd be more likely to delay purchase in a deflationary rather than inflationary environment.
Confidence is what it's all about. Confidence makes people splash out on lower priorities. Fear makes people hoard their reserves, but not so they can buy luxuries when things get worse."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Bluntly, I don't think it is worth wasting my time further with you if you do not understand that current monetary policy has very largely been based around the japanese, sweedish and argentine crises and has little to do with the great depression.
Monetary policy is basically to avoid becoming Japan.
Sweden was able to devalue their currency (after saying they wouldn't) to bail themselves out of trouble.
The issue today is that the world is interlinked. The UK consumer spends less. Then a Chinese factory catches a cold. As the scale of investment has been huge.
A sobering thought. There are currently more unemployed people in Spain than the population of Denmark.0 -
I can see no reason why we could not have deflation in prices without deflation in wages, purely due to efficiencies and buying from overseas low wage economies. Everyones a winner.0
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Even during the 1930s a lot of people benefited. If you had a job, and kept a job, falling prices made you better off.
And presumably, capitalism as it was then, suffered, while the man on the street benefitted in many ways?
Would answer a lot for me if my thoughts above could be verified.0
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