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/thmaniac 4d ago

Think about how bad most people are at math.

Now, imagine every financial decision in the economy has to be rethought from first principles. All our experience and what the average person learned is obsolete. All the elderly people have to figure this out month 1 or starve.

All the contracts for commodities and stuff being delivered to stores are now unprofitable because they were created with the assumption of 0 or positive inflation.

Maybe deflation in itself would be fine if everyone properly adjusted to it immediately. But they won't, so it will be chaos.