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Gas and food prices would likely drop like a stone if we are facing another 2008-like crisis. A handful of people made a big bet that during the credit crunch
by spamizbad 4y ago
Gas and food prices would likely drop like a stone if we are facing another 2008-like crisis.
A handful of people made a big bet that during the credit crunch we’d see massive inflation and took big bets against the dollar and cheap oil and lost their shirt
- ptero 4y ago> Gas and food prices would likely drop like a stone if we are facing another 2008-like crisis. Not necessarily. For deflation to occur, especially in staple goods (for which demand is sticky) in addition to stable or contracting money supply (M2) you need significant supply side growth. Neither is certain. I personally doubt that politicians will hold the purse closed at a time when lower and middle income voters are stretched thin. Deflation-causing policies also tend to lower tax revenues. My bet instead is that crisis or not we will likely see debt deflation via below inflation interest rates. Just a personal position, I do not have a crystal ball.