Quote from: PodBayDoors on July 05, 2014, 10:25:30 PM

It's depressing to see people in this thread talk about "mild inflation" as though it's accepted to be something good. It's like saying "mild theft of your bank account is OK". As central banker Paul Volcker said "a 2% inflation target means that a worker loses 70% of his savings during a 30-year working life".

Deflation is also otherwise known as "productivity". Humanity becomes more productive in things like agriculture, IT, manufacturing and the cost of goods is supposed to go down. Guess what, under that system the standard of living also goes UP.

But oh no, banks want to sell more debt and protect existing debtholders (even if insolvent) so they hire politicians and academics to spout absolute rubbish about how "oh oh inflation is good, really, no, no, really". Lower prices keeps people from buying things, oh, oh wouldn't want them to actually SAVE any money now would we? OK genius riddle me this: if LOWER prices mean people buy LESS, then why do companies like Amazon and Walmart do everything they can to make their prices CHEAPER? This reasoning would say oh no just raise prices and people will want to buy more.

Let's see, it's better for me if A. I go to the store and receive the same quantity of goods as last time I was there, or B. I go to the store and receive LESS goods for my money than last time. Select ONE scenario that makes you WEALTHIER. This is not rocket science

Short answer: Because mild inflation is easier to control than deflation or runaway inflation.

Amazon or Walmart arent good examples. Thats micro. Were talking about macro.

People buy more when economies are robust and people have money to spend. Deflation is usually a sign of recession