Ok but actually think about it. What’s bad about deflation? Poor people’s money becomes more valuable? Deflationary periods are bad in the US because companies don’t take care of their employees and lay them off instead of having 1 qtr with low profits.
Because when prices are constantly going down, it’s always better to wait until prices have gone down even more before you make a purchase.
The result is that as deflation sets in, consumption also starts going down, which means profits and revenues go down, which means costs have to be cut, which ultimately leads to layoffs, and as more people become unemployed and have reduced income, what they are willing/able to pay for goods and services goes down.
And now you have a deflationary spiral. These spirals tend to be hard to avoid under deflation and can lead to very high levels of unemployment.
Ok but why do costs have to go down? God forbid the company posts a flat earnings report for the qtr. your problem of thinking is that you are giving companies the benefit of the doubt. In economic down turns they are slow to lower prices but will raise them at the drop of a hat. They are quick to lay them off in bad times but slow to hire in good times.
Corporate greed is why deflationary periods are so harsh.
Ok but actually think about it. What’s bad about deflation? Poor people’s money becomes more valuable? Deflationary periods are bad in the US because companies don’t take care of their employees and lay them off instead of having 1 qtr with low profits.
Ok but why do costs have to go down? God forbid the company posts a flat earnings report for the qtr. your problem of thinking is that you are giving companies the benefit of the doubt. In economic down turns they are slow to lower prices but will raise them at the drop of a hat. They are quick to lay them off in bad times but slow to hire in good times.
Corporate greed is why deflationary periods are so harsh.
In what way does this disagree with the quote.