Name: Anonymous 2013-04-08 17:34
What the Hell is wrong with the Fed? The dollar NEEDS to be deflated, not kept at its currently overly-inflated state.
The "deflation is bad" theory is the biggest academic-sponsored fraud in history.
Yes, deflation would royally screw some people (say the overleveraged type of people) but it would reduce prices, which in an economy where people have LESS money would incline them to buy MORE which in turn would help stabilize the flow of money which would in turn increase consumer confidence which is all the stock market really is. It's not like the money disappears. People are just afraid to spend it.
We NEED people to spend money, not just sit on it and see what happens. And lowering prices (which is the net effect of deflation because it INCREASES the value of the dollar) is exactly what a consumer-based economy needs.
Attempts to prop up prices only benefits those in unions, those holding assets, and government bureaucrats who want to raise taxes. Deflation is only perceived to be a problem because of the reckless expansion of credit that preceded it. The unseen effect of the Fed's attempt to prop up wages and prices directly led to a loss of jobs to China.
If deflation caused a downward spiral in which "everyone holds off their purchases expecting lower prices tomorrow", then not a single computer would have been sold since 1990. Yet, the price of computers, memory cards, wide-screen TVs, and in fact everything technological has been dropping for ages.
Deflation has never ever been tried, but rest assured, we "know" it doesn't work and it's evil. Nevermind that the status quo is a complete failure.
The "deflation is bad" theory is the biggest academic-sponsored fraud in history.
Yes, deflation would royally screw some people (say the overleveraged type of people) but it would reduce prices, which in an economy where people have LESS money would incline them to buy MORE which in turn would help stabilize the flow of money which would in turn increase consumer confidence which is all the stock market really is. It's not like the money disappears. People are just afraid to spend it.
We NEED people to spend money, not just sit on it and see what happens. And lowering prices (which is the net effect of deflation because it INCREASES the value of the dollar) is exactly what a consumer-based economy needs.
Attempts to prop up prices only benefits those in unions, those holding assets, and government bureaucrats who want to raise taxes. Deflation is only perceived to be a problem because of the reckless expansion of credit that preceded it. The unseen effect of the Fed's attempt to prop up wages and prices directly led to a loss of jobs to China.
If deflation caused a downward spiral in which "everyone holds off their purchases expecting lower prices tomorrow", then not a single computer would have been sold since 1990. Yet, the price of computers, memory cards, wide-screen TVs, and in fact everything technological has been dropping for ages.
Deflation has never ever been tried, but rest assured, we "know" it doesn't work and it's evil. Nevermind that the status quo is a complete failure.