Why would deflation hurt the economy?

The technology sector is super deflationary. Computers get 2 times better every 2 years. If you were in 2000 and you had 1000 dollars, you could buy a computer with a really shit cpu and ram. If you waited 20 years, you would have a computer that's 1000x better for the same price. According to the "lol deflation bad hurr durr no one spend" argument, no one would waste extra money on technology knowing that their money could buy better tech a few years later. This doesn't happen obviously with normies wasting money on every new playstation and iphone that comes out. Is the "deflation bad" argument all just a scam from the (((central bankers)))?

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retard

Why doesn't the argument work for tech products then, retard?

velocity of money falls off cliff.

people won't lend. borrowers default destroying more money.

Why cant i hammer nails into the wall with a donut?

people want things now than later. deflation is a (((bad))) thing because it discourages spending and spending is what makes an economy run. the central bank doesn't want to make holding cash ever a good proposition.

More nodes more senties.

The short answer is that it doesn't. Neither moderate inflation nor deflation hurt the economy. What hurts the economy is the moral hazard occasioned by monetary policy which for various reasons tends to favor inflation. The money supply is used for wealth redistribution and reckless spending. Harder to do that via deflation, so inflation is the usual way.

Predictable supply favors the common man who can plan around it. Manipulated supply favors those people and parties who have political connections and financial savvy.

how does deflation of any sort not hurt the economy?

All the industry standard software gets bloated in proportion with the gains in processing power

you could wait 10 years for a better pc but that's 10 years you weren't making money with photoshop, 3dsmax, visual studio, or whatever.

Also, inflation favors borrowers and thats what we need since we are strapped to the fiat rocket. Riding the Tiger. 2008 was basically lenders getting caught ahead of monetary policy. Once policy caught up to the needs of the market things went back to jolly hockey sticks. All utilitynin a fiat system must serve expansion or the hypothesis fails completely. 1 second of deflation might be tolerable to this system but as a policy its the same as drinking poison.

because Im not going to wait 2 years if i need a pc now

This. People that think money won't get spent are retarded
>Just wait until next month to eat user, you'll be able to buy bread for $1.97 instead of $1.98.

inflation favors spenders and people with debts and deflation favors savers. Neither is necessarily bad. The mantra is that we have to inflate the shit out of everything for gdp growth but then we pay for it when the economy contracts. A deflationary environment might not grow as fast but it also wouldn't suffer from the frequent downturns.

yeah but right now everybody is already heavily leveraged

so what. they took a gamble and part of that is being susceptible to loss. you can't just have the central bank pumping your shit forever. that isn't even pretending to be a free market.

By deflation I mean a decrease in the ratio between money supply and demand.

How does deflation hurt the economy? And consider that we are or rather could be speaking about hypothetical economies here, not about our current one which assumes inflation and needs inflation to persist. Why does moderate deflation hurt a hypothetical economy?

I'm not arguing moral hazard, im saying delation now would put tons of people out of business/jobs etc, and would be catastrophic to the economy. Anyway I think monetary/fiscal policy stays loose and we get a roaring 20s followed by depression when it collapses under its own weight

deflationary systems work if the currency is backed by something other than debt

I'm not arguing about hypothetical economy. I'm arguing about present economy. Either way I wouldn't mind deflation, I have pretty good savings and am pretty underleveraged. Being able to pick up cheapies would be great.

Most people are paycheck to paycheck with 50 loans, and most businesses are worse.

The missing piece to judging inflation and inflation is savings versus debt. Guess what? (((Bankers))) hate it when you can buy things on savings. The especially hate it when you can buy the dip on savings. Imagine their anger when something dips down, savvy savers buy and then they are in the money.

Instead, (((Bankers))) want to use your money which you are saving and use it to buy the dip for themselves.

This is what Bankers want you to focus on. But have you ever heard of hyper deflation? No, but there are plenty examples of hyper-inflation. What happens when deflation occurs and velocity drops? (((Banker))) get fucked when there is a bank run. They have solved this by convincing people that Banks need to get bailed out with public funds. Especially when they sell the top and buy the dip.

Your most of the way there.

Keynes talks about price stability being important for small businesses that would go out of business if deflation occurs to quickly. His solution taken to its natural and obvious conclusion is endless debt and wage slaving for all that are not in the inner circle of (((Bankers))).

And those systems get eaten alive by a fiat monopoly. Duh. If btc had to support or grow from an actual economy it would fail. It WILL fail if fiat collapses. Or when fiat collapses as seems inevitable.

Isn't this a dangerous precedent? Doesn't policies that came out of 2008 great recession come with the assumption that people and corporations will take on and handle debt accordingly?

No. It assumes that policy must serve. Anyone that was looking for policy to guide was simply ignoring reality. The politicians will campaign on the idea that we have an ability to guide the economy through policy but the truth is that that guidance could only ever be downward. Capitalism has inherent structure and it cannot be reasoned with or controlled. You can stop it or watch it burn but it cannot be fixed or improved. We are probably in the dreamtime before the real end of history right now.

>real end of history

End of peace more like it I think. I think major war is coming.

>We are probably in the dreamtime before the real end of history right now.
Do you say this because of the policies and actions taken by the fed since March?
What exactly are you seeing that makes you believe this?
I am not saying you are right or wrong but it seems to me that the fed and government want to keep the economic happy times going or at least the illusion of it.

War and peace are not relevant. As long as the fiat system endures we are chained to expanding wealth inequality. What that means is actually not that the poor become meaningfully poorer but that the wealthy are making jump to lightspeed so to speak. This is, in reality, impossible. And so the notion that faith and power can move mountains forever meets the immovable mountain of materialism. Real things have real value and you cannot inflate that to infinity.

It's not inherently bad for the economy, and it's good for people. Clown-era Keynesianism is total bullshit.

this is the morally correct evaluation, the path is trodden. what i'm really interested in is what's a feasible plan of action to pivot away from this inflationary strategy? jerome powell has cautioned against it in the past but he's strangely mum on the issue now that he's fed chairman

No solution to inflation. I believe the consensus is that it isnt high enough because the lending isnt creating enough debt. They want people absolutely enslaved for eternity with consumer debt used on Chinese toys and disposable lifestyle purchases like jetskis and cars.

>No solution to inflation
That is obviously wrong, but can you clarify? My first assumption is that you are stupid and i'm trying to mitigate that habit. The rest I absolutely agree with

Seems like people simply don’t care that deeply, everybody is thinking short-term, otherwise we would’ve had figured this situation a long time ago

Just the balloon burstage at this point, and hope it’s a mild one

Ah, I understand. Sorry for my frustration. I'm expecting there to be some pleasure in seeing the destruction of all the fake productivity when it happens, though.