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Deflation
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You are currently reading a thread in /biz/ - Business & Finance

Thread replies: 31
Thread images: 3
I read, that deflation is a looming global threat.
Progressing this issue could help save your assets and your asses.
Because this problem has potential to induce dangerous situations.
And I thought about it.
Conclusion: A big part of the problem is overproduction of economic goods and a big part of the solution is to temporarily shift focus towards production of important less-economic goods.
If the thread persists and some interest grows, I can elaborate.
>>
Stfu, faggot
>>
Most of the world right now is experiencing inflation. The US is one of the few exceptions right now. While this makes imports cheaper for consumers, it make exporting goods more costly and will hurt trade on our end.
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>>1072760
I agree.
The deflation threat is only a threat and avoided by central banks' interventions, for example via quantitative easing.

I should have added a link to a news overview:
https://www.google.com/search?gl=de&tbm=nws&authuser=0&q=Deflation&oq=Deflation&gs_l=news-cc.3...0.0.0.1735.0.0.0.0.0.0.0.0..0.0...0.0...1ac.&gws_rd=ssl
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>>1072780
>The deflation threat is only a threat and avoided by central banks' interventions, for example via quantitative easing.
avoided for now, I meant
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>>1072739
The world is in dire need of a correction. Some economies didn't corrected themselves in 2008, and now we're going to see that global correction. This is why trading is at an all time low. No one is buying or producing.
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>>1072780
It's not, you're wrong. Inflation has been concentrated in global asset markets, though the US did debase their currency after 2008.

Deflation is happening globally (exported by China, Europe). If the US is still inflationary, it won't be much longer.

Japan has been drowing in deflation for years, they are barely treading water. Abenomics and most recently their NIRP is hinting at increasing desperation by the BoJ
>>
Who am I going to believe?
>The Fed who is raising interest rates on inflation fears
>OP, who is a massive faggot

The choice is clear
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>>1072859
The US has had inflation issues in the past fifteenth years. There was all this hidden inflation which was overlooked because of low interest rates.
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>>1072739
yes, I'm sure whatever levers you want to pull won't make anything worse. THAT's never happened before. lever pulling always works according to plan.
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>>1072836
So we buy bitcoin and wait for shit to hit the fan?

Let's hope a few of these shitty euro countries and Argentina and Brazil fail hard
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>>1072836
the industrial base of the west hollowed out as a matter of intentional policy. a correction won't spur more production

>>1072843
>japanese on the brink of collapse meme
where do you guys get your news? the new york times?
>>
Deflation is real, it's here and it is not going away. With Japan going NIRP and most of the world at ZIRP or little better it is pretty obvious deflation is major obstacle to moving forward. Oil and the commodities are evidence of that. Collapsed GDP around the world is showing deflation. Most of this is a result of real ugly demographical trends, Japan has been grappling with an upside down population pyramid for two decades now. Germany side stepped the worst of that (second oldest country by demography) by joining the EU, now the EU has caught up to both of them. This guy here really has his finger on the pulse:

http://econimica.blogspot.ca/
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>>1072739
Janet Yellen released a statement saying that she thinks headwinds against net exports (deflation) will let up soon. But hey, when has the Fed ever been right?
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>>1073237
Janet Yellen said there was no housing bubble. >>1073237
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>>1072739
>I read, that deflation is a looming global threat.
Don't worry, Jimmy. The central banks will save us. They haven't steered us wrong yet.
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>>1072739
If only they could just print money to combat this problem.
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>>1073298
Try fighting inflation by increasing interest rates and decreasing government spending. It wasn't the Fed not having the ability, it was just their terrible policies.
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>>1072924
How many more consumers can we fit on the planet? Isn't the joint getting pretty much full? If say there was another Black Death or something, how would one profit from the ensuing deflation if that is even possible?
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>>1072843
>>1072924
From seeing the problem I guess you could be a little bit interested in the reasoning leading to the conclusion I gave.
>>1072756
>>1072760
>>1072836
>>1072859
>>1072863
>>1072864
>>1072873
>>1072896
>>1073237
>>1073293
>>1073298
>>1073308
>>1073330
>>1073443
Thanks for replying.
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>>1072896
>japanese on the brink of collapse meme

Is that what I said? Wow. Thanks.

Their real economy is healthy. Once the govt. steps out of the way and the monetary system resets (see: many ways this can happen) they should be okay. The biggest risk is political in nature, and honestly, I think they're too well educated (and compliant) as a nation to make a mistake like that.
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>>1074017
The world economy has billions of parameters. So I simplified it:

1/2
Deflation, in an strongly simplified economy of two agents, approached with the start for thinking:


Two people on an island. one hunter and one gatherer.
They produce some tools, the gatherer produces spears and the hunter produces pots.
Both trade some of their product for better nutrition and equipment.

One abnormal year there is much deer as well as there are much berries.
Both get a good surplus to trade in and save some time, which they use to produce more tools.
As they meet to trade, they both have more to offer.
All products have increased in count by a (simplified) equal percentage, while their rate of usage grew slower.
Effect:Both have more of all. Joy. All products are now held in lower regard per item. Or: deflation. (What 'deflates' here could maybe better be expressed with "overproduction-induced complacency".)
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>>1074488

2/2

Interesting here could be the analogy to the deflationary spiral:
When trading, both offer the usual low amounts of their produce. As all is more, 'prices' on both sides are stable. After exchanging the usual amounts, both offer their surplus, in lower expectation. As the surpluses are equal, still the 'prices' stay the same. But the more they exchange beyond their need, the less they value all products.

Were there an externally provided lasting currency like glass pearls and goods were exchanged only for glass pearls, their per-pearl value would grow/inflate and the value of the goods would sink/deflate. There would be an incentive to trade goods for pearls, which would worsen the 'overproduction-induced complacency'.
There seem to be the solution of growing the numbers of glass pearls in pace with goods, but this would only diminish the incentive to trade goods for pearls. Pearls would sink in value in pace with goods. The imagined problem of 'overproduction-induced complacency' would be extended on pearls.

(in part avoidable problem: Next season, even unwillingly, the effort to acquire could be reduced while the consumption could be increased, resulting in a greater likelihood for a shortage in the next season, which then increases likelihood of conflict threatening both.
Compared to standard theory this is a very different formulation of the resulting problem, which holds much chance for a mistake that for now eludes me. )


There seems to be a chance for action as soon as overproduction/oversupply appears:
Temporary secured wealth in economic goods sometimes seems to give the liberation for attempting to advance less-economic parts of society.
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>>1074488
>>1074494

He has a new wheelbarrow, or
Bump.
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>>1072739
>Conclusion: A big part of the problem is overproduction of economic goods

that's an extremely outdated idea back from the great depression from non-economists.

hint: they would consider our output today as impossible without astronomical deflation.
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>>1075042
Thanks for your answer.
>that's an extremely outdated idea back from the great depression from non-economists.
In the simulation it seems right. So I fail to see the flaw.
>hint: they would consider our output today as impossible without astronomical deflation.
It seems to me, that consumption and dependencies progressed, making luxury goods from back then standard and the consumption effort much easier and faster.
And beyond some mathematical rules I mostly fail to imagine further progress as well.
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From the lack of responses I guess, that the issue is perceived to be of little relevance, as there is no offer of personal gain.
So here it comes: Maybe consider to convert and invest resources into less-economic goods, as these, according to the previous theory, will tend to outperform economic goods.
How to sort these less economic goods, like a poem or a political theory or a hug? I am unsure and work on it, so far with few results.
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>>1075453
>that consumption and dependencies progressed
that's why production can't cause runaway deflation, people always demand more
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>>1076224
Thanks for your answer. I appreciate your concern for this IMO high-potential problem.

>people always demand more
Right, and I propose, that, cyclically changing, this more consists
more or less of less-economic goods and
less or more of economic goods.
If production develops away from demand because the surrounding culture has shifted, far-spread overproduction and mentioned consequences to me seem possible..
>>
I may be unable to make an interesting case. Here some somewhat parallel thinking from Mohammed El-Erian: http://www.bloombergview.com/articles/2016-02-01/market-swings-expose-central-banks-influence-and-limits
>>
last bump
Thread replies: 31
Thread images: 3
Thread DB ID: 489336



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