In contrast to that tiny period, inflation has been massive over the past 100 years. So why is deflation such a bad word?
Deflation, is it really that scary?
By Dan8267 Follow Tue, 29 May 2012, 4:48pm 643 views 4 comments
In Boca Raton FL 33433
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Because Keynesianism seems to require debt-fueled growth. Paying off debt with inflated dollars is easy, paying it off with deflated dollars not so much.
I would absolutely love 25% deflation, but most of the rest of the country would be up shit creek with a turd for a paddle.
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If you own your own home, have potatoes planted and can shoot straight at the starving survivors, it's no more terrifying than living in Dresden while it was burning.
Get used to it.
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Deflation, is it really that scary?
It is when you are (something like) 16 Trillion in debt. Otherwise no.
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People who live mostly off wages and who have few assets love deflation.
Salaries are sticky, so it's like getting a raise.
People who have lots of paper assets get hammered.
Inflation for them is free money.
Debtors also want inflation...to pay off the debt.
This is the great co-option of the middle class.
By turning savers into debtors, they created a forced alignment with the paper holders...whereas naturally a person with skills who works for a living would want deflation, they were turned into gamblers hoping for their house or 401k to make money for them...even though they were making a small fraction of what the Buffet types were making.