/biz/ - Business & Finance

>>18000985
Not when this is happening

also wall of text pilled

Spot on. Maybe summer will push people to go out more and spend. If not we are screwed.
If you don't have 1 year of your bills saved up you will end up on a street.

>>18000985
what about helicopter money?

>>18000985
Mostly right, but a few minor corrections:
• Not all crisis is inherently deflationary. The oil crisis (nearly half a century ago) was strongly inflationary.
The current crisis has an inflationary element (loss of production because of people staying home rather than going to work) and an even bigger deflationary component.
• Normally a deflationary spiral is VERY EASY to get out of; it just requires the government to run a bigger deficit.
• This time the deflationary spiral may be harder to get out of because of the quarantine measures taken to control the spread of COVID19. But once those are over it should be easy to get out of.

>>18001156
Lets hope people will spend it all on stupid things.

>>18000985

Deflationary recessions occurred in the past because we had "harder" money, so during during a collapse of credit there was a spike in demand for real cash, which didn't actually exists. What happened was people became unemployed which decreased productively. The problem is essentially allocation of capital.

The situation is much different now. Productivity has been shut down to fight corona. And while credit is collapsing, the government (including the fed) is taking historical steps to print money and extend credit, not contract it. Credit is being expanded right now, not contracted, and production is decreasing. These are the ingredients for hyperinflation, not a deflationary spiral.

There is panic right now and people are flocking to cash, which is why the dollar is strong in the short term. Once the production / supply issues start causing shortages of goods, then we'll start to see prices sky rocket.

>>18001181
They wont if they are scared. And you know most are. Fed will keep brring, gibs will go over the roof. At some point people will finally feel "safe". You know what comes next

>>18000985
You can't have deflation if you can print infinite amounts of money, you drooling retard.
People won't stay in cash, because they don't trust the government anymore, because the government failed to protect them from a pandemic. Everyone realizes they are on their own and are stacking PMs, Swiss Francs and BTC.
It's not a "crisis", it's the collapse.

>>18001197
Aren't credit/debit cards fixing this problem? There can't be cash shortage when everyone is paying with plastic. Why would people want cash in todays world when you can pay with phone or card.
I have cash at home, but no idea what to do with it. Paying with large bills make you look like retard and slows down sale.

>>18001249
>Why would people want cash in todays world when you can pay with phone or card.
Because my bank shut down "due to corona" and other banks in Germany, France and Italy imposed payment and withdrawal hard limits ranging from 1,500 to 10,000 euros..
The banks will go belly up by the end of this quarter and there will be no cards. Say good bye to you money if you didn't close all your accounts when this started.

>>18001197
well, the thing is that the money which is used to bail out the banks never actually gets in to the "real" economy. Instead it is used to pay interest on radioactive junk bonds and other shit. If you would bail out the consumer directly, but they couldn't even pass payroll tax breaks. When nationwide quarantines are coming up, this shit doesn't matter, because people won't be able to buy stuff. They might just be able to pay their rent or mortgage, but they can't spend the rest

>>18001239
the infinite amount of money doesn't matter if it isn't spent

>>18000985
> deflation death spiral
any previous example of this in history?

>>18001249

Yes, that supports my argument that we will see price increases, not deflation.

>>18001285

Right, so the banks don't fail like they did in 1929. In 1929 you literally lost your bank account. Now most people pay things electronically, they never touch cash, and there is the FDIC to insure deposits. So no real cash has to exist, another argument for inflation, not deflation.

>>18001297
Read economics 101 before posting here

>>18001027
I'd give it 50 50 between ending up in the street or all landlords being given the 1950s china treatment.

>>18001197
Those are not the ingredients for hyperinflation. That happens when a country tries to hold its currency's official value above its market value. Or when it prints a load of money and immediately sells it off to fund a foreign currency repayment. Or when (like Weimar) there's no effective taxation system.

>>18001197
^this is the correct answer
If you price things in gold we have been in a deflationary recession for the last 20 years. But since we price things in arbitrary fiat currency, we've had inflation, and are about to get a whole lot more of it:
>rapidly shrinking availibility of goods and services
>rapidly expanding money supply via central banking debt monetization and money printing
Cash is the smart move now as long as you can convert it to discounted real investments before the deflation window slams shut for good.

>goes down 10 percent
>boomers: AAAAAAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH

>>18001327
Anon did have a pint there. People generally aren't behaving the way you predicted.

>>18001327
You should. Deflationary spirals are in thing in bad economic conditions despite sometimes a massive increase in money supply. Look at Japan.

>>18001197
> Productivity has been shut down to fight corona.
Actual production isnt down much, most factories, manufacturers and private companies are still running, consumption is way down though.

The service sector is completely shut, not the manufacturing sector, you are basing your entire argument on wrong information.

>>18001347
I have problem grasping when will deflation turn into inflation.
What signs to look for, goceries prices?
I want to survive and benefit, but have only little idea how to time it correctly

>>18001400
This, I don't get why people are fighting over food, all factories are operating 24/7, and only choke point are people buying like retards. How many more chickens do they need. Stocking up on perishable goods is new level sad.

Can't trump just issue state of emergency, enter war-time economy, and force corporations to produce?

>he fell for the deflation meme

>>18002406

That's the dumbest thing I've read all day.

>>18001327
Debt and inflation literally do not matter.

>>18001234
>but he didn’t know...

>>18001315
japan

>>18001450
>someone plz answer

>>18001177
Problem is that the optimal survival strategy individualistically is to horde resources and minimize costs in case of a long quarantine. This is why even helicopter bucks might not work, everyone will save it.

>>18000985
This is why BTC is crap and whoever invented it is an economical moron

>>18001450

When milk is $9.99.

>>18003168

Fed will have squads go house to house breaking windows to force people to spend the Trump bux and grow the digits.

>>18002406
It’d be nice if we took this debacle as an opportunity. Look at this through a longterm lens and start moving the production back, even if it means tougher times in next 5 years. Fuck the high time preference boomers.

>>18001020
>printing out 1/20th of your gdp per day to give to jews
feels good man