View Single Post
  #46  
Old 02-11-2016, 11:05 PM
Le Bernardin's Avatar
Le Bernardin Le Bernardin is offline
Member
AAA
 
Join Date: Jul 2013
Posts: 852
Default

Quote:
Originally Posted by Elinor Dashwood View Post
Wait, I'm confused. In a deflationary environment, if you put a $100 bill under your mattress, wouldn't it be worth $102 in a year in real terms?

Whereas if you lend it out and the guy repays you $99 at the end of the year, then that $99 would be worth 99 * 1.02 = $100.98 in real terms.

Or am I not thinking about this correctly?
Yes, it also means that it's better/easier to lay you off and hire a much cheaper replacement. The only people that deflation is good for, is for people that don't need a job or any income coming in to survive.

I thought this graphic did a pretty good job at simplifying it. Part 2 hasn't come out yet.
Reply With Quote
 
Page generated in 0.27876 seconds with 9 queries