yeah, right. Falling computer prices have killed the computer industry, haven't they? lol
And of course if food prices fall, most of us will stop buying food because it'll be cheaper next month.
liberalness....stupid on steroids
Obama Howls at the Moon
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yeah, right. Falling computer prices have killed the computer industry, haven't they? lol
And of course if food prices fall, most of us will stop buying food because it'll be cheaper next month.
liberalness....stupid on steroids
So when prices are falling, purchases are delayed. I see. So when we see all these sales of 20% off TVs and stuff around the holidays, or at some liquidation sale, all those people lining up to buy are actually just window shopping?
When prices fall, you say "I was planning to eat this weekend, but I think I'll wait for next week - prices will be cheaper."
Here is a great read on how the swiss franc, which appreciated 20 some-odd percent overnight and caused price deflation, caused a mania in purchasing.
And although you won't read it, because you ignore anything that doesn't jive with your narrative (rather than seeking first to see if there might be flaws in the counter-argument), but here is an excellent read on deflation.
http://mises.org/library/what’s-so-scary-about-deflation
Deflation is only scary to those in debt way beyond their means, and to those that lent the money to them. The so-called "rentier class" that you claim to despise so much.
You're speaking as a lib theoretician. I'm looking at how it actually works, right now, in my business. If you want more, look at the news in Williston ND.
So the Swiss reaction was theoretical? Did anyone tell the Swiss?
When prices of crude falls, investment in Williston ND is supposed to decline and that money should be pointed to more productive places to use it in the economy. That's the way economics is supposed to work before leftists started screwing up the profession. The only reason they let it work the way it's supposed to in Williston is because the left hates fracking and they hate Russia. Otherwise, they'd be screaming about a lack of aggregate demand in oil and screaming for someone to stimulate it all back to some price level that they all agreed in their ivory towers was the 'right' price.
There are probably two main factors behind their purchasing surge. One, buyers were on the verge of making these purchases anyway. Two, the price moves are considered (rightly or wrongly) temporary.
In case you're still not convinced, by my experience, or by the reality (for some of my customers) unfolding in Williston ND (and towns in TX), try this:
http://en.wikipedia.org/wiki/Deflation
Probably two main factors. LOL!
The Swiss create a record in shopping as soon as the CHF appreciates, and it's a coincidence. They were all planning to bum rush the mall anyway. Uh huh.
I've read that wiki link on deflation before. You should read it a bit clearer to see that it doesn't completely support your side of the argument.
But still, the wiki article does mention the primary fear in deflation:
"Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt"
I don't need "complete" support for my opinion that deflation is a bad thing. Complete support is what zealots need. The article does not say the "primary" fear of deflation is with debt.
No, you don't need complete support. The problem is that you never bother to read or understand the fine print. That is, you just say something like "deflation is bad". Like it's black or white. There certainly are aspects of deflation that are bad, but it depends on who you are talking about. To a single mother of 4 kids on a strict budget who rents, deflation is overwhelmingly good. To a corporate man who bought far more house than he can afford and has 6 maxed out credit cards, maybe not so much. For seniors who live on fixed income and are subject to government manipulation of their COLA anyway, deflation is a great thing (they get no interest as it is, might as well have prices lowered).
No one can ever be sure precisely what you are talking about, but I think what you meant when you originally referred to as deflation being bad is long periods of extended deflation. The Japanese, for example, though no one at the BoJ has ever been able to solve this without killing the economy, and the Japanese keep on buying what they need despite severe deflation for well over a decade.
It's like your "gold is not money" commentary. Just black and white - never for a moment can it be money in certain circumstances, etc. Just "no". Someone with your limited economics understanding putting finality to topics like this is quite entertaining.
