>If you target 0% inflation and miss on the wrong side, you get deflation, which means prices are going down. When prices go down, people hold onto their money, which can result in sellers lowering prices to increase sales. OMG everything is getting cheaper and everybody can buy more that so bad.
>The perception of inflation can induce people to spend, which grows the economy. If people think that a car that costs $15k today will cost $17k next year, they might be more interested in buying now. OMG with deflation I might only pay 5k on a car next year which means I can only by 3 cars instead of 1 that's so bad for the economy.
>Inflation reduces the burden of existing debt. If you owe $10, that's three lattes (roughly). But if there's inflation and you hold onto the debt, now it's only worth 2 lattes. OMG I can't live on borrowed money anymore that's so bad because borrowing money is so good - everybody should be in dept!
Do I have brain damage? I'm unable to understand this behaviour. It feels like someone is punching my face and when I say "pls don't do this" everybody says "nonono that's good for you! You haven't studied face punching you don't know how important this is!"
I tried reading what you wanted to say but during 60% of reading i think i my brain exploded. I literally did not understand anything you (are you human?) wanted to say. Back to the cosmos alien!
Jace Foster
Keynsian economics is retarded
Aaron Evans
You're correct. Most people don't understand this shit at all so they don't care and the ones that do understand just get in on the game.
Justin Sanders
>Prices go down, wow that’s good! Except that also causes unemployment since companies need to reduce their workforce because of the lower prices. You are short sighted faggot, it’s not because in the immediate you have more purchasing power that it’ll work out for you in the end.
Nathaniel Fisher
I know what you're trying to get across. If we had uniform measurements of value that weren't constantly distorted, people would have a better sense of how much things cost them. A boomer's old, 9 mpg death-trap of a car would have been $5,500 but a new Tesla would cost them $4,000 if money was hard. Because money is not hard, people constantly don't know what the cost of borrowing or investing money should be. With everyone trying to beat inflation and with cheap credit, we have malinvestment everywhere and very little savings. The entire boom and bust cycle is deliberate because it is enormously profitable for the central banks, and retard high-time preference NPCs are blind to the swindle.
Leo Anderson
You are very short sighted.
Deflation rates do not impact everything equally. It isn't some magic sale on both raw materials and goods, it is the concept that consumer confidence decreases and spending goes down, then sellers reduce prices to keep up and their margins decrease.
This then reduces production, essentially lowering revenue and even GDP. Companies like your coffee one start laying off workers and then workers spend less money, other companies feel ripple effects and then they lay off workers.
Stopping production because you want cheaper coffee is how gdp lowers. That is the issue with deflation.
Slight inflation is the inverse, huge inflation numbers are a reflection of major currency changes, which we don't need to mention for your example.
Oliver Taylor
Labor is a cost. Everyone forgets this fact. If prices go down so do wages. Things getting cheaper doesn't mean you can buy more things. Because you'll also get less money since the companies can't make as much money.
Nathan Rivera
No, instead of pay rises you would have pay cuts. The only problem is human psychology.
Adrian Brooks
Being paid less brings more complexity to the problem then just firing people. When you cut people, you have a clear view of how the productive is gonna change, who’s gonna have to do what. Being paid less isn’t as easy to visualize, and can in fact cost more in the end to the company. Companies would rather not have to go through a headache and decide to fire people.
Justin Taylor
typical jew with 0 arguments
you're spot on OP that's why I laugh my ass off at every brainlet who invests in crypto in some shitcoins based on "the tech" instead of monetary properties.
Most people think that inflation just somehow magically happens and there is no way to prevent it (aka stop printing money like degenerates)
free market would find its equilibrium of supply and demand, without being distorted by degenerate printing and forcing the market in a specific direction without really giving people the freedom of choice.
based and redpilled
>>This then reduces production, essentially lowering revenue and even GDP those are just numbers that have 0 direct correlation with the standad of living. Muh gdp, meanwhile people have to wagslave longer and longer despite the productivity going up over time.
doesn't matter, people would be able to mantain the wealth acquired through their labor, let the free market decide prices and demand
Ayden Gonzalez
Well maybe everything would move to regular contracts with bonuses for renewing. That would be fine.
Cameron Hughes
rGDP per capita is the best aggregate measure for standard of living currently. Saying "oh you are just saying numbers" is not an argument, it is trying to discount accepted economic standards across schools of thought.
Landon Garcia
They EITHER lower the price OR lower the production (or both equally), it's connected. But we have this already - create thing X sell it for Y and then someone sells the exact same thing for 1$ less. To stay competitive the first dude has to lay off workers, lower production and price. Things are already as efficient as possible - it doesn't get any more efficent. You're implying that people will sell their products at a loss.
>If prices go down so do wages. Things getting cheaper doesn't mean you can buy more things. Because you'll also get less money But I can buy more you stupid normie. I can buy more AFTER SOME TIME. With inflation I can buy less.
What you guys are saying doesn't make any sense at all
this dude gets it
Brandon Morales
The key word is «maybe». You can’t decide on economic policies with a sense of «oh it might work out in the end or it might fuck us all, we aren’t sure»
Joseph Brooks
The best agregate statistics for that is median income PPP.
Colton Reed
The biggest problem seems to be that it's the norm for wages to "rise". People expect something like a 2% pay rise every year for the same job. Why not expect the opposite?
Your point seems to be that the way it is today, if you need to cuts costs then it's likely people would leave if you lowered pay and it would be unpredictable how many and who would leave. This wouldn't be the case if it was generally the case that wages deflated like everything else.
Leo Edwards
You are defending that all the money you have and everything you will ever earn will be worth half in 35 years (at 2% inflation) just saying.
Close you eyes and say it with me "Every money I have will be worth half in 35 years and I want this to be like that."
Chase Jackson
Deflation means you get paid less and foreign countries can buy up your assets more easily.
Ayden Reed
Yeah we already figured this out genius. If wages lower you can still buy the same stuff with it because it costs less. Other countries buying your stuff increases economic activity what's even you point?
Angel Murphy
You people are fucking retarded
Michael Butler
Deflation means: -their foreign currency buys less of your currency -your debts become harder to pay off in your native currency, easier in theirs -your debts become easier to export to foreign nations with more inflated money
