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Is there actually inflation?

So watching this pretty down the list yt video https://youtu.be/hQNqwQ0OHLg the guy, basically makes the call that we are actually not in an inflation, but looking into a deflationary crash/economy. He makes a pretty good argument for this, and gets me thinking that maybe I should at least spread out my investments more. Maybe staying more in cash rather than other assets?

What is your opinion on his hypothesis?

Edit: the video is talking about short term outlook for deflation, in case of a market crash.



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7 Comments

  1. The price of normal goods and assets has increased consistently for many years with a few short periods of deflation along the way. Admittedly I haven’t watched all the video, but we are not experiencing deflation based on the above. CPI is rising. Import/exports rising. Stock market and real estate rising.

    The federal reserve and ECB does not want deflation, it stops people spending (as they can park cash waiting for prices to drop) which causes further deflation, and essentially means that all debt becomes increasingly expensive until… we all default… and yeah… ugly picture. It would be a very long drawn out ‘depression’ that could take several years to work through. Nobody particularly wants that.

    Although our economies may dwindle (I’m not sure as technology seems to keep increasing productivity) due to things like aging populations, lower birth rates etc, it’s likely central banks will continue to print money and control interest rates to try and stop deflation where necessary. There’s too much on the line for that. Perhaps they will allow it to run its course here and there in pockets, but I’m very doubtful of any sustained multi year depression any time soon (nor do I want one!).

    In fact, I imagine that may become the new ‘normal’. Sluggish growth, followed by shallow recessions, repeat. Seems to have been the way in Japan. I think it all hinges on whether technology can continue to increase productivity and GDP can continue to grow.

    In reality, none of us want major deflation or inflation, it would lead to very hard times either way. If deflation does occur, everything will drop, Bitcoin included. All assets will lose value. Keeping some cash on hand is never a bad idea ‘just in case’.

  2. Some predict deflation followed by hyper-inflation.

    As the system begins to collapse, a lot of debts go bad, destroying fiat money and creating deflation pressure. The last thing central banks seem to want is deflation, so they print their fiat currencies to death to ensure that they and their cronies get bailed out at the expense of everybody else.

  3. Yes correct, the printing money story that you hear memed around the Bitcoin community is actually false. Printing money does not cause direct inflation. Rather loan and credit creation along with strong consumer spending is what causes inflation. But right now for example the fed attempted to stimulate spending and cause inflation by giving stimulus checks. However people are using their checks to pay off debt. When credit and debt is paid off, the overall pool of cash in the system goes down = deflationary. So the fed can only print money in order to hope for inflation, they cannot control it simply by printing.

  4. Go to the supermarket and buy anything other than the bullshit selective “basket”.

    > What is your opinion on his hypothesis?

    Too long winded. I’m not going to sit through 15mins of some youtuber talking at me.

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