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Can somebody explain Deflation?
#1
I brushed the dust off Robert Prechter's book and was reading about Deflation.  I just can't get my head around it.  Can somebody please explain it, and how what is happening now with Covid19 could cause Deflation, and what it would look like?
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#2
(03-27-2020, 04:01 AM)silverfish Wrote: I brushed the dust off Robert Prechter's book and was reading about Deflation.  I just can't get my head around it.  Can somebody please explain it, and how what is happening now with Covid19 could cause Deflation, and what it would look like?

Where I live, it looks like gasoline at the pump selling for $1.75 Gal.
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#3
When people spend less, prices go down.  Either those who might have been spending have less, or just want to save more.  This can include willingness to buy or keep money in risky investments.  This causes there to be less economic activity which induces a circular effect.  Seems that the decrease in spending can be related to either income or value of investments or attitude or any combination.
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#4
(03-27-2020, 04:02 PM)aqualech Wrote: When people spend less, prices go down.  Either those who might have been spending have less, or just want to save more.  This can include willingness to buy or keep money in risky investments.  This causes there to be less economic activity which induces a circular effect.  Seems that the decrease in spending can be related to either income or value of investments or attitude or any combination.

In addition, when prices start going down, people soon realize that even if they intend to buy something, if they hold off the purchase it will cost less next week or next month. So deflation becomes a vicious circle downward.
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