Deflation Education: Secrets of the Death Spiral [Infographic]
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Deflation sounds great in theory: it increases the value of the cash you have in hand, and is the opposite of the dreaded inflation that works to make your money worth less. Still, it is important to understand the big (or in this case: tall and long) view of this process, which can have complex (and harmful) effects on economies as a whole. While this may provide you some basics, it is of course a tutorial that is basic education-focused – the best system and secrets to learn revolve around how to adapt your trading strategies with expert advice, using information about deflationary processes to inform larger trading goals. Volatility provides opportunities for profit only if you understand the big picture and how to put (and call) it to your advantage. Regardless, stuffing your cash under the mattress and hoping for deflation is probably not your best bet.
So the cure from a inflationary boom and bust is to create more inflation? I don’t think so. This should be called a Visual Guide to Keynsian Economics, and it is this kind of “solution” prolonged the great depression. Ever hear of the depression on 1920? No, because government reduced spending and allowed the free market to correct itself. Depressions happen for a reason, but they are not the problem, they are the solution to the problem created by the boom.
The fed spending money to get out of a deflationary spiral is not proven to work. You also fail to mention the govt could also cut taxes to encourage provate business spending /hiring.
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Could someone tell why people don’t hold off buying say computers and mobile phones as their prices are always decreasing?