I’m still on team inflation short term for a simple reason: scarcity will drive up prices. Then, long term everything collapses and deflation takes over.
Not necessarily. Deflation means that there’s just less economic activity and that generally asset prices decline over time. The price of consumer goods might stay the same or increase slightly. Unless you’re buying houses or vehicles you may not benefit from it.
Deflation is the general decline of prices for goods and services. It can be caused by many things, including interest rates being set too high, central banks not printing enough currency, supply shortages, or people hoarding currency because of mass psychology. That doesn’t change what deflation is, a decline In the cost of goods and services. You are confusing the definition of deflation with the concept that certain goods and services might become more expensive than others.
I’m still on team inflation short term for a simple reason: scarcity will drive up prices. Then, long term everything collapses and deflation takes over.
“Deflation masks prices go down”
Not necessarily. Deflation means that there’s just less economic activity and that generally asset prices decline over time. The price of consumer goods might stay the same or increase slightly. Unless you’re buying houses or vehicles you may not benefit from it.
Deflation is the general decline of prices for goods and services. It can be caused by many things, including interest rates being set too high, central banks not printing enough currency, supply shortages, or people hoarding currency because of mass psychology. That doesn’t change what deflation is, a decline In the cost of goods and services. You are confusing the definition of deflation with the concept that certain goods and services might become more expensive than others.
Deflation definition vs in practice. I only care about the later.