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    Deflation?

    What is so bad about it? If prices are declining it will allow more consumers to buy stuff. I thought "inflation" was bad as it dents consumer pockets disabling consumers from buying more.

    They are saying as if deflation is another sign of great-depression, is that right?
    saaray Pakistan ka ek hi naara: ehtasab ehtasab!

    #2
    Re: Deflation?

    Bro yeah this deflation is bad.
    There are 2 kind of deflations.

    1) cuz of compition eg. if Coke is a $1 product and pepsi is $0.80 then coke will have to deflate the prices and eventually both of em would find a bottom and live happily ever after.

    2) cuz ppl dont have enough money to buy the product eg. right now automakers are struggling ( also opened a thread about em few minutes ago) cuz ppl cant get loan to buy their trucks or dont have liquid cash to buy em.

    so unfortunatly with this tumbling economy we are suffering from deflation number 2 which eventually leads to bankruptcy (and then bankruptcy leads to more lost jobs, less paid taxes, more jobless claims and support claims)

    so yeah, long story short, this is the kind of deflation that noone wants.
    KON DETA HAI OMAR BHAR KA SAHARA FARAZ
    LOG TU JANAZAY MAIN BHI KAANDHAY BADAL'TE REHTE HAIN

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      #3
      Re: Deflation?

      ^ but 'price cuts' are mainly from the profits of the companies, I agree that in-order to cut inventories down retailers will be forced to sell for some loss as well but it is less likely that it will cause "bankruptcy", what do you say?
      saaray Pakistan ka ek hi naara: ehtasab ehtasab!

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        #4
        Re: Deflation?

        ^ The companies dont have money to expand or invest in new technology plus as the consumers dont have money to spend the companies cant sell thier goods and eventually go bust leading to more people becoming unemployed and a vicious circle sets in.

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          #5
          Originally posted by ehtasab View Post
          ^ but 'price cuts' are mainly from the profits of the companies, I agree that in-order to cut inventories down retailers will be forced to sell for some loss as well but it is less likely that it will cause "bankruptcy", what do you say?
          No bro, its only "initially" from the profits of the company and it has to start from somewhere.

          i used to work at futureshop (canadian version of best buy) and sometimes when some stuff was not selling the company would lower the prices, still only few pieces would sell and its occupying valueable space on ur shelves so then we would try to sell that thing on break even point (no profit no loss) and still it wont sell, then we would try to sell under cost price and still few pieces will be left and then GM would ask the employees who wants em, and put all names in a cap and randomly chose few who could get em for free.

          the thing is that ppl dont have money to buy stuff and its simple demand and supply, and its a very bad sign, if they companies cant sell the previous stock they wont make the newer one and it would mean less revenue and bankruptcy.
          KON DETA HAI OMAR BHAR KA SAHARA FARAZ
          LOG TU JANAZAY MAIN BHI KAANDHAY BADAL'TE REHTE HAIN

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