Depressions are deflationary events. They purposely create high inflation because they know high deflation is worse.
Inflation - Prices increase and regular people can't afford as much as they used to, but commercial demand for everything stays high and most people still have their jobs, keeping the cogs of the economy turning until things return to a normal equilibrium. High prices also make sure resources go to the most productive/necessary things based on supply/demand economics.
Deflation - Prices of everything come down rapidly, flooding the market with cheap goods, resulting in manufacturing not being profitable and manufacturers shutting down. People lose their jobs and the commercial demand for things plummets.
There very well could be deflation coming, but I think they do what they do to avoid it.
Depressions are deflationary events. They purposely create high inflation because they know high deflation is worse.
Inflation - Prices increase and regular people can't afford as much as they used to, but commercial demand for everything stays high and most people still have their jobs, keeping the cogs of the economy turning until things return to a normal equilibrium. High prices also make sure resources go to the most productive/necessary things based on supply/demand economics.
Deflation - Prices of everything come down rapidly, flooding the market with cheap goods, resulting in manufacturing not being profitable and manufacturers shutting down. People lose their jobs and the commercial demand for things plummets.
There very well could be deflation coming, but I think they do what they do to avoid it.