Right. Thanks. That's what I was seeing in my own head, but I wanted to make sure I wasn't missing something, before I went off on it in other conversations. :)
On Tue, Jul 27, 2010 at 1:44 PM, Jim Devine <[email protected]> wrote: > Jeffrey Fisher wrote: > > So, not being an economist and all, I wonder if this is the sort of thing > > that would be part of a cycle leading to deflation? Doesn't it sync with > > Lou's other recent post of an article on the potential for deflation? > > yes, the fact that businesses are hiring so few workers encourages > (money) wages to fall, which is what gives deflation its oomph, a > downward wage-price spiral encouraging deflationary expectations. Next > come falls in demand as people delay spending (expecting lower prices > later on) and as their debts weigh more heavily against income. Waves > of bankruptcies are next, encouraging further spending cuts. > > Of course, it's not inevitable. A hotter war would prevent it. > -- > Jim Devine > "All science would be superfluous if the form of appearance of things > directly coincided with their essence." -- KM > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l >
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