Quote from: Hideyoshi on December 29, 2013, 05:59:21 AM

Quote from: sublime5447 on December 28, 2013, 08:01:54 PM

+100 you gotta be a special kinda retard to equate falling prices that are result of greater efficacy and new technology with falling prices that are a result of a deflationary currency..

If argument is that in deflation, people will wait to spend, then why would people not wait to spend if they know tomorrow they can buy newer more efficient technology? Is there difference between waiting to buy because of new more efficient technology, and waiting to buy because of falling prices? Your statement implies lower price is bigger incentive to wait than new more efficient technology.

The problem is that we don't know if deflation is really that bad a problem. The only modern example available to us is Japan where deflation has been around for 20 years now. Japanese society is having a demographic crisis caused by low birth rates. If your population is going to fall by over a third over the next generation, the value of houses and land will also fall since there is too much. So the Japanese domestic economy is theoretically screwed and empirically we can see deflation has taken root there.

Yet the Japanese have low unemployment and a great standard of living. For example, there are more Michelin star restaurants on Tokyo than most other cities. I don't know of any way in which life in Japan could be said to be worse than life in the UK or US.

One could be forgiven for wondering whether deflation is really such a bad thing?