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

To: Oblomov who wrote (100649)	1/14/2009 12:24:33 PM
From: forceOfHabit	Read Replies (2) \| Respond to of 110194

Oblomov, Being of the Austrian school, the author would say that despite the vernacular usage of the term "deflation", falling prices are only a symptom of deflation, not the deflation (i.e. credit deflation) itself. Except that's not what he said. He said "antidote" not "symptom". BTW, I'm inclined to agree that falling prices is a symptom of deflation, not the problem itself, and also not the "antidote". The feedback loop (imho) is the actual problem, see below. So, trying to pump more money into the system in order to prevent prices from falling is treating a symptom, not the underlying disease. Like I said to ork, I think the whole point of printing money to combat deflation is to break the feedback spiral. Message 25323138 The method commonly (I think) employed to break the inflationary feedback spiral is to issue a new currency. I think it takes more than that, but I'm not enough of an economist or student of economic history to say much more on the topic. I'm sure others are much more knowledgeable on the topic than I. habit