waterlily57

Is a Crash Impending?

There was deflation in Hong Kong after the 1997 Asian financial crisis.


On Aug 31 11:56 PM Tack wrote:

> So many people mesmerized into thinking the world, or even the U.S.,
> is ending and, in the process, setting themselves up for financial
> hardship as they bet on collapse and failure, and wallow in their
> cynicism, rather than making sensible evaluations of current realities
> and choosing appropriate investments.
>
> The folks who are betting on a deflationary collapse are the most
> out of touch with logic and history, blinded by the blaze of the
> 1930's, that they (95%, anyway) never lived through and, apparently,
> completely misinterpret, when it comes to monetary policies and their
> effects. The Great Depression was probably the last deflationary
> collapse in history, and, of course, was due to a disastrous reduction
> in the money supply, which saw the 1929 levels not again reached
> until 1939.
>
> While there have been myriad international economic disasters in
> the last 70 years, no economy in the world has suffered a deflationary
> collapse. Why is that? It's because all governments learned that
> fiat money supplies can be expanded ad infinitum. There may be inflation;
> there even may ultimately be loss of trust in the currency; the one
> thing there won't be is deflation.
>
> Even if one is not optimistic about the performance of corporations
> or the economy as a whole, everybody should be "optimistic" about
> the advance of prices. Currencies abide by the same rules as all
> other commodities: the more you print, the less value they enjoy
> relative to all other things. Hence, the nominal value of everything
> will advance.