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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (88653)11/7/2007 3:14:48 PM
From: Roads End  Read Replies (1) | Respond to of 110194
 
Ok, but I want to know, did I experience deflation?



To: GST who wrote (88653)11/7/2007 10:00:17 PM
From: Broward Horne  Read Replies (2) | Respond to of 110194
 
It's not that hard to understand.

You have four apples.
Four dollars in circulation.
One dollar buys one apple.

You have four apples.
But now eight dollars are in circulation.

Inflation divides evenly across remaining goods.
An apple costs two dollars.

However, deflation involves default.
Six of the dollars disappear because they represent debt that you can't collect.

Now an apple costs 50 cents.


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