It’s pretty rare that I get excited about something like this as I don’t really spend a lot of timing thinking about – but in this instance, I’m really looking forward to learning more.
We’ve had some discussion in the comments section over the weekend, with a couple of very knowledgable participants really putting out some great info.
Deflation vs inflation…..the great debate.
I for one have thrown this around on occasion, only to find myself back where I started in the first place – time and time again. I hope I don’t create a “dead-end ” here (as I generally stick to spaceships, quiet time with ants, and the search for evidence of alien life on Earth ) and am certainly “not” an economist, but I hope we can wrangle these guys ( and whom ever else ) to shed a little light, on a an area of economics – often misunderstood.
Deflation is a “decrease” in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Deflation increases the real value of money ie…..the currency of a nation or regional economy.
Deflation allows one to buy more goods with the same amount of money over time.
*Thank you Wikipedia!” ( what you think I rattled that off the top of my head?)
Inflation is a persistent “increase” in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
So…..in a nut shell – looking at the value of a dollar in a given economy, and the reflection of “how much of what” that dollar is able to purchase at a given time – no?
Given the current monetary policy – Is the United States “currently” in an inflationary environment or a deflationary environment? And more importantly ( as we are all much more interested in the future )…..
Where do you see the United States headed next? And….(bumbuddabum bumbumbbumbbumb!!!)
Woohooo! I’ll do my best to chime in but in all honesty I’ve likely got little to add…other than my own “backward / flipped over / nutty way” of looking at it, which ultimately may not have to do much with economics as it does making money trading forex.
All opinions / views more than welcome!
Let’s get this thing licked! And thank you in advance to JSkogs in particular. A valued reader and contributor here at Kong, and from what I gather – a pretty all around great guy.