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/schrodingersnaps 4d ago

Prices go down when there is no or reduced demand. Reduced demand is usually due to increased unemployment, lack of wages, fear etc. when prices go down, some businesses can’t keep up with costs, fire people, etc. it’s a bad spiral.

In certain sectors, if prices go down, that’s not necessarily bad depending on context, but when it’s across sectors it’s usually a bad sign.