Deflation

Bantex_2

N1AK wrote: »

Feel free to keep listing examples of products people will continue to buy, though I have no idea what you expect it will prove. People spend less during deflationary periods, it isn't conjecture or theoretical models that tell us this; it's multiple real life examples of it happening.

Perhaps you'd like to provide us with an example of a nation going through a deflationary period that benefited most of the working/middle class?

Think Switzerland has had sub 1% and dipping into minus territory inflation for the last decade or so.

They seem to be doing OK for themselves.

IveSeenTheLight

michaels wrote: »

incomes are likely to fall too as employers can no longer afford the salaries of each workers output is worth less

In my industry, we are seeing lots of reports contractors are being hit with 10-15% day rate reductions

Thrugelmir

wotsthat wrote: »

We've lived in an environment of inflation for our whole lives. I don't think any of fully comprehend how we might behave if the purchasing power of money increased over time because goods and services are falling in price.

Pointing out that essentials will remain essential doesn't shed much light on how we may behave.

I was actually pointing out that these are currently falling and/or likely to fall at the current time.

Purchasing power increased over 2 decades from the early 90's. Thanks to cheap Chinese labour and therefore cheap goods to import. Aided by developements such as container ships that make transportation negligible. There was no miracle boom in terms of productive output. Peoples money simply went further.

wotsthat

Thrugelmir wrote: »

I was actually pointing out that these are currently falling and/or likely to fall at the current time.

Purchasing power increased over 2 decades from the early 90's. Thanks to cheap Chinese labour and therefore cheap goods to import. Aided by developements such as container ships that make transportation negligible. There was no miracle boom in terms of productive output. Peoples money simply went further.

Is this deflation or some stuff getting cheaper?

lisyloo

Iveseenthelight - which industry please?

Thrugelmir

wotsthat wrote: »

Is this deflation or some stuff getting cheaper?

A combination I would say.

Crashy_Time

lisyloo wrote: »

Iveseenthelight - which industry please?

Take a guess, he thinks it always goes up, and they are always making more tenants :eek:

ging84

I think it's about time someone rewrote the rule book in deflation

If wages suffer deflation then yes that is very bad, but with so much spending tied either directly, or indirectly to oil / energy prices, a big upset in the oil and gas markets can slash a lot of prices, but not make those things less profitable to sell, in many cases they could become much more profitable.

missjames

Oil is in deflation as well as the stock market and commodities.

In deflation like this all debt is going up in value in relation to the things that are in deflation.

Cash is king.

shaggydoo

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