TakeAStepBack
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- Mar 29, 2011
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You have to also remember on monetary inflation that we've had decades worth of Keynesian economists that believe deflation is the absolute devil. They fight it harder than inflation. But defaltion can be a sign of a good economy/sound monetary policy.
When prices fall, purchasing power increases. Reducing the need to stimulate by creating more supply. Sure, that reduces wages too, but when prices fall, you don't require more money, so it's the same balancing act, except savers and builders win instead of borrowers and consumers.
When prices fall, purchasing power increases. Reducing the need to stimulate by creating more supply. Sure, that reduces wages too, but when prices fall, you don't require more money, so it's the same balancing act, except savers and builders win instead of borrowers and consumers.