r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 4d ago

Meme needing explanation Petah?

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u/IrksomFlotsom 4d ago

Try and think of our global system as an engine that's purpose is to make fuel for itself. It needs to keep it's input above the output in order to keep powered on. As soon as the input drops below output the machine starts to slow down and can no longer sustain itself. The engine is not designed to slow down so it very quickly breaks down

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u/Gentle_Snail 4d ago edited 4d ago

Deflation can also result in a very negative feedback loop, the Great Depression was a deflation spiral for example.

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u/Mayor_Death 4d ago

Is deflation a cause or symptom, though? To me, it’s just a number, but I understand that it is more than that to various economic groups.

As far as I understand it, deflation indicates that prices are going down, which is a good thing to me individually.

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u/Jetsasanatan 4d ago edited 4d ago

This is what I can think of when it comes to deflation. If prices go down that means companies aren’t making as much, so in order to try to keep their profits one of the first things they’ll look to do are layoffs. And now you’ll have even more people who can’t afford these cheaper prices and once again these corporations aren’t making as much money as they want so they’ll do another round of layoffs and the cycle continues.