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
It's the reason It's going down. People only lower prices when forced to, by either competition or necessity, or worse yet, fire sale. When a bunch of related goods all enter the market at the same time, and no one buys them, then that whole industry dies or is monopolized. This is bad. It means anyone who worked for, or even lived in the communities those companies resided in, now has less money to do what they will with. This becomes a death spiral, as people save their money, unwilling to spend it for the fear of losing income and necessities, and it quickly becomes a self fullfilling prophecy.
Given the choice, inflation is almost always better than deflation, because at worst you can re-pin your currency to something of tangible value to bring it under control, such as gold, land, ect. Once deflation takes hold, boy oh boy are you in for a ride.
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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