this post was submitted on 30 Dec 2024
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cross-posted from: https://lemm.ee/post/51182148

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[–] [email protected] 3 points 4 days ago (1 children)

Because when prices are constantly going down, it's always better to wait until prices have gone down even more before you make a purchase.

The result is that as deflation sets in, consumption also starts going down, which means profits and revenues go down, which means costs have to be cut, which ultimately leads to layoffs, and as more people become unemployed and have reduced income, what they are willing/able to pay for goods and services goes down.

And now you have a deflationary spiral. These spirals tend to be hard to avoid under deflation and can lead to very high levels of unemployment.

[–] Pacattack57 0 points 4 days ago (1 children)

Ok but why do costs have to go down? God forbid the company posts a flat earnings report for the qtr. your problem of thinking is that you are giving companies the benefit of the doubt. In economic down turns they are slow to lower prices but will raise them at the drop of a hat. They are quick to lay them off in bad times but slow to hire in good times.

Corporate greed is why deflationary periods are so harsh.

[–] [email protected] 3 points 4 days ago

Corporate greed is why deflationary periods are so harsh.

In what way does this disagree with the quote.