Quote from: CoinsCoinsEverywhere on July 04, 2014, 06:51:43 AM

Quote from: boumalo on July 03, 2014, 07:31:41 PM

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At least in the US, this is simply not true. During the 2008 crisis, everything turned negative, including retail sales (see this chart: http://www.macrotrends.net/1371/retail-sales-historical-chart). US consumers bought less in 2008 and 2009 than they did in 2007, despite any reduction in prices.

Globally the US didn't have deflation
Government computed inflation (therefore minimised) :
2008 3.8%
2009 -0.4%
2010 1.6%

If inflation was -0.4% in 2009, how was that not deflation? If you want a better example of how bad deflation can be, look at the first part of the Great Depression.

1929 0.0%
1930 -2.3%
1931 -9.0%
1932 -9.9%
1933 -5.1%
after 1933 it turns positive again for a few years

Quote from: boumalo on July 03, 2014, 07:31:41 PM

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And btw, there's still some risk in money market securities. We haven't seen a crisis bad enough to really jeopardize the money markets, but it's possible.

It did jeopardize the money markets in 2008 but the government intervenes and guaranteed the funds, they double the bet once again and got lucky, remember?

Yes, that's a better way of putting it. Thank you.

Quote from: boumalo on July 03, 2014, 07:31:41 PM

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The US has been printing money at an insane rate the past several years, and it's worked so far, but it can't go on forever.

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No amount of money printing will be able to save the situation.

YES

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If that happens in a disorderly, crisis-like fashion, the whole world is screwed.

Disagree here, most if not all countries will suffer at first but it will be great for hard working countries with natural ressources low taxes and regulation and high saving rate

I suppose it would be possible for such countries to do ok, but there aren't many countries like that (can you think of some examples?), and they would have to be very isolated from the global economy. Usually countries with strong economic growth and a good industrial base (e.g., China) are exporters. If a significant portion of a country's economy depends on demand for their exports, they get screwed during a global crisis because no one has the money to buy their exports anymore.

Quote from: boumalo on July 03, 2014, 07:31:41 PM

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You say what you think people should do. But I say what actually happens and has happened many times in the past. This may seem counterintuitive and working against logic, but human psychology is not about logic. And it is surely not what you think it should be.

Do you buy less when the price goes down? Give me exemples of when YOU buy less when the price goes down!

This doesn't have to do with desire. This has to do with capability. There were some good price breaks/sales during the 2008 crisis. I would have loved to have taken advantage of them, but I couldn't because I was unemployed for a couple months at the beginning of 2008. As a result, my family and I didn't have extra money to spend on cheaper products. The whole reason they're cheaper in the first place is that fewer people can afford them.

Prices going down were the only good thing in the Great D, do you think prices going up would have been better for people having very limited ressources?

People have less money in depression times so it is good that prices are lower not higher

China will fair well after the USD collapsed and the dust has settled

tee-rex : savings are good, consuming on credit is bad

slimus : the bubbles arrived because the FED created them with low interest rates, when Greenspan increased the interest rates it was the solution to get a much needed crisis to eliminate the bad debt but they decided to re-inflate bubbles because they care about the present not the future