04-02-2020, 12:27 PM
** 02-Apr-2020 World View: Deflationary spiral
No, we're in a classic deflationary spiral, like the 1930s.
Even people who have money, or are given money by the government,
don't want to spend it, and so they're not pushing goods prices up.
Businesses that have money, or are receiving it from the government,
are not competing for employees, and so they're not pushing labor
prices up.
The velocity of money, which has been falling for 13 years because of
the 2007-2008 financial crisis, will plummet even further. This means
that money provided by the government in stimulus packages will
remain in bank accounts, rather than be used to buy goods beyond the
absolute necessities, so the prices of new tv sets and other things
will continue to fall, resulting in price deflation.
Guest Wrote:> John, I have tried to read between the lines and I'm not good at
> it sometimes. Do you think we are still headed to an economic
> depression instead of uncontrolled inflation? Will we need
> millions of dollars to buy the rare loaf of bread in the coming
> months or will the bread be available but no one has any dough to
> buy it?
No, we're in a classic deflationary spiral, like the 1930s.
Even people who have money, or are given money by the government,
don't want to spend it, and so they're not pushing goods prices up.
Businesses that have money, or are receiving it from the government,
are not competing for employees, and so they're not pushing labor
prices up.
The velocity of money, which has been falling for 13 years because of
the 2007-2008 financial crisis, will plummet even further. This means
that money provided by the government in stimulus packages will
remain in bank accounts, rather than be used to buy goods beyond the
absolute necessities, so the prices of new tv sets and other things
will continue to fall, resulting in price deflation.
