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If deflation is so dangerous I wonder why anyone buys consumer electronics which, despite currency inflation, continue to decline in price due to advances in te
by reedlaw 15y ago
If deflation is so dangerous I wonder why anyone buys consumer electronics which, despite currency inflation, continue to decline in price due to advances in technology. If we experienced the full effect of deflation, today's iPad would cost a much tinier percentage of yesterday's Apple II. Would that have stopped people from buying either? I doubt it.
- sethg 15y agoIf we experienced the full effect of deflation, then average wages would be falling, as well as the average prices for everything (not just for consumer electronics, which make up a very small percentage of the average person’s expenditures). This would be particularly bad news for any person or business that carried, or expected to carry, debt. You wouldn’t want to take out a mortgage on a house (or have your company borrow money to build a factory) if you expected that the nominal resale value of the house would go down and your nominal income would go down while your nominal monthly payments would stay fixed.
- danenania 15y agoExactly. The consumer electronics industry is enough to dismiss this idea on its own.
- prodigal_erik 15y agoConsumer electronics are unique right now in becoming orders of magnitude more capable before the old versions even begin failing. New products sell because nothing comparable was even available before and it's inconceivable that next year's version could be better somehow (even though it will). No other category has this going for it.