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Not that it would happen often, but could you imagine the outrage of people losing salary during periods of deflation? No way this works long-term imo, but mayb

Not that it would happen often, but could you imagine the outrage of people losing salary during periods of deflation? No way this works long-term imo, but maybe I'm missing some ideas to balance it.

deleted 2y ago
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elashri 2y ago
How often do you think we see periods of deflation compared of inflation? I mean deflation not a decrease of inflation rate.
- kulahan 2y ago
  Probably not often, as indicated by the first few words of my sentence.
- b112 2y ago
  The less common a thing, the more one must be prepared and consider it lest everyone frwak out.
- gen220 2y ago
  Deflation favors debt payors instead of debt issuers/servicers, and our whole economy is constructed to favor the latter group, because having a "healthy" system of debt supports faster economic growth than a system with no debt. (in theory). The whole raison d'etre of free-floating govt-supplied fiat currency is to make deflation impossible. We haven't had real deflation since bretton woods, when we gave up the gold standard.
  - Sohcahtoa82 2y ago
    > Deflation favors debt payors instead of debt issuers/servicers Wouldn't that be the other way around? If I take out a $30K loan to buy a new car, and I'm paying $500/month, then if the economy happens to go through an extreme amount of deflation a year later and now brand new cars are only $10K, then as the payer, I'm still paying $500/month and $30K total, except that amount is worth a lot more. Whereas if massive inflation happens, the payer gets a huge benefit, assuming their salary keeps up with the inflation.
    - deleted 2y ago
      [deleted]
    - dexwiz 2y ago
      I think you are correct and GP has the right idea for wrong reasons. In the long term people will stop borrowing in a deflating economy which will harm debt servicers. Financial institutions collapse when your mattress is better place than a bank for money.
aaronblohowiak 2y ago
Central banks will not tolerate deflation, too destabilizing
- deleted 2y ago
  [deleted]

Not that it would happen often, but could you imagine the outrage of people losing salary during periods of deflation? No way this works long-term imo, but maybe I'm missing some ideas to balance it.

deleted 2y ago

[deleted]

elashri 2y ago

How often do you think we see periods of deflation compared of inflation? I mean deflation not a decrease of inflation rate.

kulahan 2y ago
Probably not often, as indicated by the first few words of my sentence.
b112 2y ago
The less common a thing, the more one must be prepared and consider it lest everyone frwak out.
gen220 2y ago
Deflation favors debt payors instead of debt issuers/servicers, and our whole economy is constructed to favor the latter group, because having a "healthy" system of debt supports faster economic growth than a system with no debt. (in theory). The whole raison d'etre of free-floating govt-supplied fiat currency is to make deflation impossible. We haven't had real deflation since bretton woods, when we gave up the gold standard.
- Sohcahtoa82 2y ago
  > Deflation favors debt payors instead of debt issuers/servicers Wouldn't that be the other way around? If I take out a $30K loan to buy a new car, and I'm paying $500/month, then if the economy happens to go through an extreme amount of deflation a year later and now brand new cars are only $10K, then as the payer, I'm still paying $500/month and $30K total, except that amount is worth a lot more. Whereas if massive inflation happens, the payer gets a huge benefit, assuming their salary keeps up with the inflation.
  - deleted 2y ago
    [deleted]
  - dexwiz 2y ago
    I think you are correct and GP has the right idea for wrong reasons. In the long term people will stop borrowing in a deflating economy which will harm debt servicers. Financial institutions collapse when your mattress is better place than a bank for money.

aaronblohowiak 2y ago

Central banks will not tolerate deflation, too destabilizing

deleted 2y ago
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