:eek: :eek: :eek: :eek: :eek: I can recommend good books on the material. Perhaps I deserve to be ignored. But guys like Milton Friedman, Hayek.........I dont think soooo.... By the way how old are u??
You like most have been brainwashed into the belief that somehow, more expensive housing is a good thing. Once you see things through an undistorted lense, it becomes clear that housing inflation only leads to economic instability. As for workers, they will be forced to take a lower paying job unless they want to rely on government handouts for the rest of their lives. It is already happoning. It's just simple supply and demand. The higher unemployment is far from over, we have not reached the peak unemployment yet, we have only delayed it. We cannot stop unemployment from running it's course. All we can do is go into more debt if we try. As more and more people lose their jobs, more and more people will get more desperate and will make the decision to take a lower paying job. More and more pressure will continue to build for more industry, environmental laws will eventually relax and industry will grow. Deflationary spirals are not perpetual and unending. Everything has their tops and bottoms. Why is it I never hear anyone ever describe the last housing boom as an inflationary spiral?
Strange arguments against deflation. I bought a computer the other month even though I know if I waited till this month I could have bought it cheaper and probably better spec as well. The reality is that people don't wait to buy just because stuff becomes cheaper. If you expect food prices to go down next week, do you say to yourself, "hey, i ain't eating anything this week, it will be cheaper next week!" I would love it if there was general price decreases. Imagine, everything becoming cheaper to buy, week after week! Of course there's a limit to deflation. Prices can't go below zero. It's the exact opposite with inflation. Prices can go to infinity (well, close enough!). Just ask a Zimbabwean.
Imagine... people who formerly could not afford to buy a house or car, could. Yeah, deflation is a really rotten thing.
My teenage nephew was of the same opinion. Told me we were in a recession because house prices were going down. Basically, he equated rising prices as a sign of prosperity and vice versa
thx... I don't understand how to argue against that... Ohhh nnoooo !!! and then they would have to pay maintenance/utilisation cost and co... You should explain to him the concept of economies of scale, robotization, human innovation... and foremost layerization. From the first graph : Wanting to stop the natural occurence of inflation/deflation is like wanting to stop the tide of the ocean... you know water come and then retreat... so on and on... or like the relation sun/rain... both are necessary in alternance...
"Just as inflation scarred a generation of Americans, deflation has left a deep imprint on the Japanese, breeding generational tensions and a culture of pessimism, fatalism and reduced expectations. While Japan remains in many ways a prosperous society, it faces an increasingly grim situation, particularly outside the relative economic vibrancy of Tokyo, and its situation provides a possible glimpse into the future for the United States and Europe, should the most dire forecasts come to pass." Also, just after the Civil War spike in inflation, there was sustained deflation in the US until around 1900. Grover Cleveland was voted in, then voted out, then voted in again, the only President to serve two terms separated by four years out of office, because of the discontent bred by this deflationary period. Fortunately we still had the frontier to let off the steam at that time. Nothing like that exists today, of course, so if you had a sustained deflation again, which is what the Fed is trying to prevent, the discontent would of course be all bottled up with no place to go, until it would explode one fine day. Check that chart posted at the top of the thread, you can see the persistent, gradual deflation.
Excuse me on which chart ? I don't see on the first chart a single trace of deflatation since the 50'...
Look between 1850 and 1900. There's a spike which represents the Civil War, then mostly deflation until 1900.
http://research.stlouisfed.org/publications/iet/japan/page4.pdf According to this, deflation is very subdued, a couple of percent this year, in '08 they had roaring inflation of 2%. Prices are ridiculously high in Japan and need to come down but for whatever reason, they aren't coming down fast enough. The article goes on about "loss of vigor" being the result of prices decreasing. However: "This loss of vigor is sometimes felt in unusual places. Kitashinchi is Osakaâs premier entertainment district, a three-centuries-old playground where the night is filled with neon signs and hostesses in tight dresses, where just taking a seat at a top club can cost $500. " $500?????!!! Perhaps if the price was $100 there would be more "vigor".