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What is worse inflation or deflation?

Posted: Tue Jun 22, 2010 5:43 pm
by vbironchef
What is the impact of deflation compared to inflation? Reason why I am asking is that more people that I know invest in gold and silver. I am worried that a huge bubble is happening and gold will wipe out peoples investment. How do we pay down our national debt? Our intrest rates are a zero. Seems to me the only way is to cut spending and raise taxes. I don't see a light out of this tunnel.

Re: What is worse inflation for deflation?

Posted: Tue Jun 22, 2010 7:30 pm
by dgood
Deflation usually is worse, I believe (someone should go get some facts.) on the other buried topic you mentioned. How about cutting a few departments. Do we need homeland security? we have the DOD it worked fine on its own for years. I've always liked the idea of grant reform too. Give incentive to cut spending to do the same amount instead of every grant I've seen spending every dime to ask for more money. End Rant.

Re: What is worse inflation for deflation?

Posted: Tue Jun 22, 2010 8:42 pm
by Apoptosis
vbironchef wrote:What is the impact of deflation compared to inflation? Reason why I am asking is that more people that I know invest in gold and silver. I am worried that a huge bubble is happening and gold will wipe out peoples investment. How do we pay down our national debt? Our intrest rates are a zero. Seems to me the only way is to cut spending and raise taxes. I don't see a light out of this tunnel.
The demand for gold is insane and they can't mine it enough to back what people want to buy in gold, so I don't think gold is going to ever wipe people out. If you read about what the mines in South Africa are doing and how deep they are (~15,000 FT) it's insane... people will always want gold. Wish these were still in the family:
4602_109380931210_503316210_3112290_3240338_n.jpg
4602_109380931210_503316210_3112290_3240338_n.jpg (35.59 KiB) Viewed 1267 times
Sold them when they were ~$930 each, but now are $1240... sad

I personally think inflation is worse to answer your question.

Re: What is worse inflation for deflation?

Posted: Tue Jun 22, 2010 9:05 pm
by vbironchef
I heard that the U.S. might lower intrest on saving accounts. Nothing like keeping the poor man down. Yea, I do think gold and silver are a safe bet, but at these levels I don't won't to get burned. I feel that the economy is going down the toliet and there is nothing we can do about it. Most people say just ride it out and don't look at the stock market. I really believe that the s*** is going to hit the fan very soon. Then what?

Re: What is worse inflation for deflation?

Posted: Wed Jun 23, 2010 7:51 am
by Apoptosis
vbironchef wrote:I heard that the U.S. might lower intrest on saving accounts. Nothing like keeping the poor man down. Yea, I do think gold and silver are a safe bet, but at these levels I don't won't to get burned. I feel that the economy is going down the toliet and there is nothing we can do about it. Most people say just ride it out and don't look at the stock market. I really believe that the s*** is going to hit the fan very soon. Then what?
might?

The banks already have interest on savings accounts down to 0.1% as they and the governments don't want you to save money. they want you to spend it to keep our massive economy rolling... It's been like this the past few years and lowering it from 0.1% to 0% won't cripple anything as I haven't seen anyone rush to the bank to make 0.1% interest.

Re: What is worse inflation or deflation?

Posted: Wed Jun 23, 2010 3:15 pm
by Sowser
Back in the 80s interest rates skyrocketed to about 20%. This was done in order to impose deflation of the currency. It's an extreme measure as it hurts badly in the present but it is effective in the long run. The U.K. is seriously thinking about swallowing this bitter pill to get their economy righted.