Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: HPilot who wrote (473837)	4/21/2009 5:32:56 PM
From: tejek	Read Replies (1) \| Respond to of 1575427

Deflation is how the market adjusts for depression. Deflation is the result from the bursting of a bubble. If left to spiral down without abatement, Japan is the result.

To: HPilot who wrote (473837)	4/24/2009 8:45:50 PM
From: combjelly	2 Recommendations Read Replies (1) \| Respond to of 1575427

"Not if their goods and supplies are also less expensive." Why is it that wingnuts, despite their claims of expertise in economic matters, are such nitwits on the subject? This is true. However, the thing you haven't factored in is that in a deflationary scenario, you still have your previous debt. And that becomes relatively larger with respect your expenses. So you either have to increase unit sales or increase your profit margin. Both of which are difficult to do in such an environment. So you have businesses getting overwhelmed by debt and folding, one by one, until there are few enough to be able raise prices. "Deflation is how the market adjusts for depression." No, deflation is the final nail that makes depressions so much fun for everyone but the very rich. "Preventing it by printing more money only puts us in debt" Why not make things even worse by showing you know even less than you have displayed so far? Printing money doesn't raise the debt load. What it does do is inflate the money supply. If balanced, it could fight deflationary pressures. If more is printed than that balance point, it means inflation. Which is bad. But it makes the debt that is denominated in dollars smaller. And that is good for everyone but the bankers. Who don't have a lot of sympathizers at the moment. So if the monetary policy is crafted intelligently, then the net effect could be minimal. Not saying that they will be able to strike a balance, but the one thing it won't do is increase the debt. You really shouldn't get your understanding of economics from Glenn Beck.