William Lee, chief economist at the Milken Institute says, there is no question that China is in deflation, as the consumer price index fell 0.3% year-on-year in July. “The question is how long is it going to last,” he adds.
There is no question that China is in deflation: Milken Institute
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If inflation is bad how come deflation is also bad 😅😅😅
@GOT Fan And only the Americans can reverse deflation. 🙂
@Vale Tudo I was just asking…
@Andreas LucidreamerAh my bad then. I thought it was a cheeky comment… deflation is bad because:
1 it indicates that people aren’t spending money to the point that demand for goods is so soft that prices start to go down. This could be for many reasons but it often means a lack of confidence in the future of the economy and future earnings of individuals.
2. If prices are going down then people tend to spend even less because they think prices will go down further and by waiting they can get things for cheaper later…similar to how you might wait to buy a TV now because you think next month it will be on sale. This isn’t bad if some people do it, but if everybody does it at the same time then it actually hurts the economy, decreases demand further which leads to more deflation and the cycle continues.
2.5. One person’s spending is another person’s paycheck. If everybody is not spending at the same time then a lot of other people can’t make money. They still have to pay rent, mortgages, and other obligations at a fixed price. So with less money is coming in, businesses lay off workers, go out of business, taxes and revenues for government goes down…etc. All of this increases deflation even more. This is how the damage to the economy occurs.
It’s a vicious, self-reinforcing process. So just like being too hot can be bad in real life or the economy (inflation) being too cold in real life can be bad or the economy (deflation). The sweet spot for an economy seems to be warm (mild inflation about 2% or so).
Anyways hopes that helps a bit and sorry for being a dick. Didn’t know it was a legit question.
@Kong Wee PehIt took the Japanese 25 years to escape their deflationary enviroment. Deflatoon isn’t some western concept. Take an economics class
@Andrew Michieli Yup, American never has any deflation. 🙂
Chinese people are saving.
Westerners wish that they can save at all due to higher interest rate and inflation.
🤣
Lol you don’t know anything about economics, do you
America doesn’t like I’m rich of their inflation China doesn’t like I’m Rich off their deflation England doesn’t like I’m rich off their pound for pound and the euro as valuable as it is it’s going nowhere
So its a good excuse for not buying Treasury Bill….LOL. They need the money for themselves.
America is no doubt in Quitation – so many businesses are closing down due to legalize shoplifting