TonThe inflation we are experiencing is temporary.Considering the nature of the case, this is the simplest explanation Base effectWhat the “inflation pump” cannot explain is why the deflation we have experienced over the past 40 years has suddenly changed. The burden of proof lies with them. Considering that the default deflation is to restore deflation, there is no reason why it cannot become negative: deflation.
You will see inflation being talked about everywhere:
In the financial world, when everyone is saying and doing one thing, they are betting on the opposite result. Everyone says that there will be inflation, so it may not happen. This is how it works in the market. The fact that the mainstream media is talking about inflation with neighbor Karen should scare you. Don’t follow suit! In fact, the fact that the Fed has not even achieved 2% inflation in the past ten years should give you a hint. The Fed is worried about deflation, not inflation.
Don’t fall in love with pump fakes.
remember, The Fed is a lender, not a spender. At least for now they are not allowed to spend money, so they Must not increase speed Money.
With deflation, we will see Negative interest rate. The Fed will have no choice. So far, in our deflationary environment, they have been reluctant, but deflation will force them to take action.
Deflation is very bad for those who are heavily in debt. This is because deflation increases the real value of debt. Since our society is currently heavily in debt, this will be painful. Some people now argue that this pain is necessary, but the moral and political issues are the structures that put people in this situation, first by providing crazy incentives: such as the Federal Reserve and Congress.
So we will not only have negative interest rates, but also Congress will forgive debts as well as. Some people will object that this is a moral hazard, but it doesn’t have to be. If it is done in the wrong way, it will only be a moral hazard. If it is clearly shown that people are getting crazy incentives and debt relief is a one-time transaction, then there is no moral hazard problem. One of the debts most likely to be forgiven is student loans. Most likely, forgiveness can be as high as $10,000 or $50,000. The government participates in loans and encourages the cancellation of crazy loans, so they must correct their mistakes. ¹ This is especially true because they prevent you from declaring student loan bankruptcy. ²³
You might say, “What’s wrong with deflation? Lower prices are good!”. This does not solve the problem I have already mentioned. Deflation increases the real value of debt. And because our society is currently heavily in debt, most people will be screwed up. Therefore, the problem/objection confuses good deflation (technical deflation) with bad deflation (debt deflation). No one denies that deflation will increase the real value of debt.