That’s deflation, and is actually really bad for society and the economy overall.
Honestly, more workers need to unionise and restore wages to where they should be (pegging back to rates in the 80s - 90s), minimum wage should be closer $25/hr.
If real wages continue to rise higher than CPI for blue/white collar workers, rather than the capital class - things would be a lot better overall.
China recently deflated and is still having problems. It’s incredibly dangerous because it causes a negative feedback loop. Prices go down -> people wait to get a better price on something -> prices sink further -> people wait longer -> your economy starts stalling out and going into a nosedive.
Nobody wants to be the chump holding the bag if they buy an apartment for $50k and it drops to $20k in the next five months. :/
If deflation worked, everyone would be doing it, and we’d still be using half-cent coins just like the family in Little House on the Prairie did. (Which would kinda be awesome, I’d love to pay a half-cent for an orange.)
Money that is kept and never spent is worthless. Currency has to be used to have value, otherwise it’s just paper (or bits). The working class won’t hold on to their money, they have bills to pay, groceries to buy, etc. Only the wealthy would hold on to their money, which they’re already doing.
That was my point, pretty much. The issue is that money that’s kept is useless for society, but if its value increases it gains potential usefulness for its owner. I’m not saying that ordinary people will stop buying food and I’m not saying that corporations are doing community work right now, but the world in which the rich get even richer without even spending their money on something will be problematic at best. The economy will crash while everybody will hold on to whatever moves they have.
Like loans to companies and individuals, startup investments, stock purchases, etc. Money that moves around is useful. Money that is tucked under a mattress is not.
The fuck you think investors do at all? What value do they create?
They definitely don’t pay my wages from their own “investment”. My wages are paid from the profits created by myself and coworkers working to create, market, sell, distribute the product. Soon as those profits don’t hit targets investors will absolutely vote to downsize or shutter entirely, not “invest” and continue paying wages.
Prices didn’t go back down.
That’s deflation, and is actually really bad for society and the economy overall.
Honestly, more workers need to unionise and restore wages to where they should be (pegging back to rates in the 80s - 90s), minimum wage should be closer $25/hr.
If real wages continue to rise higher than CPI for blue/white collar workers, rather than the capital class - things would be a lot better overall.
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China recently deflated and is still having problems. It’s incredibly dangerous because it causes a negative feedback loop. Prices go down -> people wait to get a better price on something -> prices sink further -> people wait longer -> your economy starts stalling out and going into a nosedive.
Nobody wants to be the chump holding the bag if they buy an apartment for $50k and it drops to $20k in the next five months. :/
If deflation worked, everyone would be doing it, and we’d still be using half-cent coins just like the family in Little House on the Prairie did. (Which would kinda be awesome, I’d love to pay a half-cent for an orange.)
Deflation is actually bad because it would be an incentive to keep rather than spend money as its value would just increase by itself.
Money that is kept and never spent is worthless. Currency has to be used to have value, otherwise it’s just paper (or bits). The working class won’t hold on to their money, they have bills to pay, groceries to buy, etc. Only the wealthy would hold on to their money, which they’re already doing.
That was my point, pretty much. The issue is that money that’s kept is useless for society, but if its value increases it gains potential usefulness for its owner. I’m not saying that ordinary people will stop buying food and I’m not saying that corporations are doing community work right now, but the world in which the rich get even richer without even spending their money on something will be problematic at best. The economy will crash while everybody will hold on to whatever moves they have.
No, they invest it otherwise it loses value over time. Invested money is put to work.
Work? Like “buying” yet another company? Or stock buybacks?
Like loans to companies and individuals, startup investments, stock purchases, etc. Money that moves around is useful. Money that is tucked under a mattress is not.
No, like paying your wages. You should read a bit about how things work before getting upset.
The fuck you think investors do at all? What value do they create? They definitely don’t pay my wages from their own “investment”. My wages are paid from the profits created by myself and coworkers working to create, market, sell, distribute the product. Soon as those profits don’t hit targets investors will absolutely vote to downsize or shutter entirely, not “invest” and continue paying wages.
Japan has had deflation for 25 years and the zombies haven’t shown up yet. In fact it’s a really nice place.
Turns out deflation isn’t so horrible if it’s only moderate, kind of like inflation.