Right. You don't want to start a deflationary trend because you can't control it. You can control inflation to some extent with interest rates, but there is little you can do when inflation goes negative and the interest rate crashes to zero. Which basically is what happened to Japan in the 90s, and I'll admit here that I don't know much…
Right. You don't want to start a deflationary trend because you can't control it. You can control inflation to some extent with interest rates, but there is little you can do when inflation goes negative and the interest rate crashes to zero. Which basically is what happened to Japan in the 90s, and I'll admit here that I don't know much about how they tackled the problem. But I do know that their economy has had problems with deflation ever since.
And I'll add that, according to Paul Krugman, wages are going up faster than inflation, which is slowing down considerably, and we still don't seem to be headed for a recession. Which seems strange, but go figure. I mean literally. Anyone who wants to figure that out, God bless you.
Right. You don't want to start a deflationary trend because you can't control it. You can control inflation to some extent with interest rates, but there is little you can do when inflation goes negative and the interest rate crashes to zero. Which basically is what happened to Japan in the 90s, and I'll admit here that I don't know much about how they tackled the problem. But I do know that their economy has had problems with deflation ever since.
And I'll add that, according to Paul Krugman, wages are going up faster than inflation, which is slowing down considerably, and we still don't seem to be headed for a recession. Which seems strange, but go figure. I mean literally. Anyone who wants to figure that out, God bless you.