Poll: World Economic Crisis Effect - Inflation or Deflation?
Artist
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As credit markets freeze and the economy slows, will demand for goods & services diminish & thus create deflation?
Or will the government's continued efforts to stabilize failing Wall Street institutions ultimately require the printing of new money, which in turn would weaken the dollar & create inflation?
Or will we experience stagflation - "A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation." (Thanks 57 loaded & Storm888)
All comments & insights are welcome.
Or will the government's continued efforts to stabilize failing Wall Street institutions ultimately require the printing of new money, which in turn would weaken the dollar & create inflation?
Or will we experience stagflation - "A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation." (Thanks 57 loaded & Storm888)
All comments & insights are welcome.
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Comments
paper assets deflating
hard assets inflating
count me as stagflation
How do you see that manifesting? If you could elaborate a bit so that I understand what you mean, I will add it to the poll.
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at least i think we are headed there
stagflation......
investopedia definition.........
A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.
Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects.
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Someday, they will have great value again. I have no idea when.
Deflationary pressures will continue to build.
Could someone please depict for me the forces that create price inflation in a stagnant economy?
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In the long run the inflationary forces will win, simply because of how fragile a fiat currency is and how strong the incentives are to inflate away debt. However, in the nearer term I think deflationary forces will rule the day and cash will be king.
That doesn't mean PMs are going in the toilet, however. There's an argument to be made that PMs "are" cash. Among other things, Yahoo's currency calculator seems to believe that gold and silver are currencies.