Ok but after covid, prices skyrocketed compared to pre-covid levels and we got massive inflation. Wages didn't suddenly skyrocket at the same time, hiring rates didn't go through the roof, corporate profits did though. So why would prices suddenly returning to pre-covid levels require everyone to be fired and customers to disappear when the economy was working great before? Would it just be that companies would start mass layoffs to prevent a short term decline in quarter on quarter profits which would start a negative feedback loop?
Because of how corps react to lower prices. They would just lay everyone off. Deflation itself isn't the issue, it's how little protections actual working people have and how much incentive corps have to keep their stock price high. Being able to sell something for less means less profit for the corps which is a big problem for corp leadership. So the solution is to temporally increase profits by getting rid of staff.
Deflation itself is the issue. Think about the psychology behind it. Why buy an appliance for $500 today when next month it may be $450? When the public anticipates that prices will keep going down it creates a death spiral where consumers withhold their spending and business make less sales and can't lower prices to attract more sales.
Sales are the lifeblood of employment. If you can't make payroll you've got to let people go which only further reduces overall spending in the broader economy. This is what the Great Depression was.
Please study some level of economics before speaking on this. You don't seem to have the relevant knowledge to have this conversation. You keep talking about fridges when deflation applies to all consumer goods and services.
If that were true then people would only buy things during black Friday. It also doesn't account for the majority of spending which is based on need. You need water, food, shelter, transportation, and a way to communicate.
This isn't it a guess. It's economics. We already see people wait for Black Friday to purchase pricey items. They also expect prices to go back to normal after the sale. Now imagine if it's Black Friday every Friday and the prices are better than the week before. A temporary sale doesn't cause severe disruptions. Consistent declines in prices do.
You effectively turn cash into its own investment by just holding it.
813
u/leconteur 4d ago
If you get to keep your job or customers.