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Deflation ?

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    Deflation ?

    Well now it seems the media is gearing up to tell us how scr3wed we are all going to be becuase of deflation.

    IANAEconomist but the follwoing makes sense to me.

    If you have fixed assets deflation will hit you badly. If you offset your assets with sterling or have no assets only liquidity, not taking other factors into account, surely the inflation which erodes your liquidity in an inflationary period will now enhance them in a deflationary period?

    We blindly assume growth is good and more growth is better. Surely a tempered structured growth would be better?

    In recent years the economy was "good".

    Inflation eroded the value of earnings which did not rise in line with inflation. If the inverse applies and deflation erodes the cost of living faster than your income would you actually be better off?

    When permy I had many payrises "in line with inflation blah blah". I have never had my slary reduced becuase of deflation.
    There are no evil thoughts except one: the refusal to think

    #2
    Originally posted by sunnysan View Post

    When permy I had many payrises "in line with inflation blah blah". I have never had my slary reduced becuase of deflation.
    No you just get sacked.

    Deflation is good for those with cash savings. Knackers everyone with debt.

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      #3
      Originally posted by KentPhilip View Post
      No you just get sacked.

      Deflation is good for those with cash savings. Knackers everyone with debt.
      Come on you deflation !

      They'll try very very hard to stop it. Bernake the Fed boss in the US has some well known quote saying he'd drop money from helicopters rather than let deflation take hold.

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        #4
        If the offficial measure of inflation included house prices, would we already be in deflation overall?
        Will work inside IR35. Or for food.

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          #5
          deflation was bad for Japan. I think there is a real danger of it in the WEst in 2 years time.

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            #6
            I don't see it happening as long as HMG get their fingers out and force big interest rate cuts. Howevever, if they continue to dither ......

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              #7
              ... also, you shouldn't wish for deflation because it will affect everybody in a negative way, especially through massive job losses. Be careful what you wish for.

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                #8
                Originally posted by BrilloPad View Post
                deflation was bad for Japan. I think there is a real danger of it in the WEst in 2 years time.
                Maybe, but peak oil fever could creep back in 2 years time.

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                  #9
                  Deflation = "Please pay invoice within the next 3 years"

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                    #10
                    Sure I read in the Telegraph today that EUR rates are no longer to be set to stop inflation. But it was quite early this morning so I might be mistaken...

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