Inflation is a form of taxation by the gov't-----especially since most gov'ts are in debt. They silently rob those who save. Right now we are having the longest period of time where interest rates are lower than inflation so the gov't can rob the wealth of savers.
The gov't since it is in debt tries to brain wash us against deflation. But if we actually had responsible gov't and citizens who didn't run up debt..deflation would be good. In fact some deflation is VERY healthy... when modern technology finds ways to increase production or save costs , prices can drop and standard of living goes up. When we finally find a new energy source that is unlimited(like star trek) then that might cause a bit of deflation due to more productivity. Also when new methods to harvest more food is implementable and the gov't gets rid of those programs that burn half our food(you knew right?) so farmers don't lose profit..maybe we will have a deflation utopia!
But all of this will be short lived if we don't force our gov't to get off their addiction of easy money..LOANS!
We had deflation a few years ago when most products were discounted and homes cost half the price and even loans to borrow was lower. A lot of folks refinanced. Ofcourse the deflatio nbasket was limited because gov't being in debt had to increase college tuition, public transportation and other gov't services.
Our 1st world gov'ts are going to have to realize the we have grown our economies as much as we can. All they are doing in the last ten years is creating bubbles.
Many conservatives truly believe we are entering a period where growth will be 0% but of course they are hoping to get it close to 2%(or at least be able to say so on paper).Its Not a bad thing...it's due partly to globalization!But we will always have higher unemployment rates than we were use to.
They say inflation averaged a little over 3 % over the last few decades...but the top economists think that 2% will be the new 3%. That being said they will be happier when it is 2.30% as oppose to 1.70% because as a gov't in debt..1.70% is closer to going negative!
Consequences of this will be CD rates that use to pay 6% will more likely hover around 5% when rates go up and the stock market index avg of 8-9% will probably go closer to 6-7%. More folks will want to put money in safe investments like cds..part of reason why gov't is artificially keeping down rates. bonds will be more risky due to default.
The developing countries on the other hand will be where the risk and rewards are!
As for sitting home waiting for things to get cheaper...actually people do it all the time with high priced items. People weren't rushing out to buy cars(used cars) and homes when prices were dropping but inventory dropped when they feared interest rates rising.
Small cost items of course and necessities don't make a difference. This is of course a big problem with our economy in the 1st place..too consumer orientated.
The gov't needs to stop encouraging folks to go into debt to FIX the economy.. that is how we get into these messes in the first place. But Democrats only know how to spend.
The gov't since it is in debt tries to brain wash us against deflation. But if we actually had responsible gov't and citizens who didn't run up debt..deflation would be good. In fact some deflation is VERY healthy... when modern technology finds ways to increase production or save costs , prices can drop and standard of living goes up. When we finally find a new energy source that is unlimited(like star trek) then that might cause a bit of deflation due to more productivity. Also when new methods to harvest more food is implementable and the gov't gets rid of those programs that burn half our food(you knew right?) so farmers don't lose profit..maybe we will have a deflation utopia!
But all of this will be short lived if we don't force our gov't to get off their addiction of easy money..LOANS!
We had deflation a few years ago when most products were discounted and homes cost half the price and even loans to borrow was lower. A lot of folks refinanced. Ofcourse the deflatio nbasket was limited because gov't being in debt had to increase college tuition, public transportation and other gov't services.
Our 1st world gov'ts are going to have to realize the we have grown our economies as much as we can. All they are doing in the last ten years is creating bubbles.
Many conservatives truly believe we are entering a period where growth will be 0% but of course they are hoping to get it close to 2%(or at least be able to say so on paper).Its Not a bad thing...it's due partly to globalization!But we will always have higher unemployment rates than we were use to.
They say inflation averaged a little over 3 % over the last few decades...but the top economists think that 2% will be the new 3%. That being said they will be happier when it is 2.30% as oppose to 1.70% because as a gov't in debt..1.70% is closer to going negative!
Consequences of this will be CD rates that use to pay 6% will more likely hover around 5% when rates go up and the stock market index avg of 8-9% will probably go closer to 6-7%. More folks will want to put money in safe investments like cds..part of reason why gov't is artificially keeping down rates. bonds will be more risky due to default.
The developing countries on the other hand will be where the risk and rewards are!
As for sitting home waiting for things to get cheaper...actually people do it all the time with high priced items. People weren't rushing out to buy cars(used cars) and homes when prices were dropping but inventory dropped when they feared interest rates rising.
Small cost items of course and necessities don't make a difference. This is of course a big problem with our economy in the 1st place..too consumer orientated.
The gov't needs to stop encouraging folks to go into debt to FIX the economy.. that is how we get into these messes in the first place. But Democrats only know how to spend.