I’m curious to see whether companies will actually reduce prices back to the norm after the bubble pops tbh. Historically, inflation only goes one way.
Inflation only goes one way because deflation isn’t really good. It creates a situation where not spending money nets a return. Inflation means you need to spend or you lose value. The ideal is wages keep up with inflation (which they aren’t).
Now, I don’t really buy into the Keynesian economics idea like I used to, that forcing spending is a good thing for the economy. Yeah, it boosts economic activity, but does that net really help the average person or only the elites? However, I still think deflation, especially to any significant degree, is almost certainly bad. It would cripple economic activity, which would cost jobs, because the best thing you could do is spend as little as possible.
However, computer hardware prices aren’t really inflation. They effect the measure of inflation, but they aren’t caused by it. They’re caused by incredible demand, and a lack of supply. There’s some inflationary effect to it, but their price has increased far faster than the price of their inputs.
Well whatever the reasons/terminology, it doesn’t change the fact that people simply can’t afford to spend ridiculous amounts on luxury/optional purchases. I know a lot of people across the U.S. who are choosing between food and rent. As for myself, I’m a disabled veteran and only get so much in disability per month. With my wife being laid off, I have exactly enough to pay rent and buy groceries every month and that’s about it. I understand what you’re saying, but unless people’s wages are actually adjusted for this new economy, these companies are going to lose money. It’s not a matter of want, it’s a matter of literally not having the money to spend.
Yeah, that’s the key. (A small amount of) Inflation is potentially a net good thing, but only if incomes keep up. As it is, incomes are effectively being reduced, because they aren’t increasing at the same rate as inflation. People are able to afford to spend less and less, while all the wealth is funneled to a select few.
Eventually this has to effectively freeze the economy, because people literally will not have money to spend. The economy only functions if most people are spending money. Having more billionaires (or trillionaires now) does not create much spending, and does not make a healthy economy.
This is all hanging on the word “inflation” in his comment, which wasn’t really referring to general inflation like you are. It was clearly restrained to computer equipment, where the current bubble is.
Maybe. Generally when people use the phrase “inflation only goes one way” they’re talking about general inflation. Inflation is rarely used to mean price increases. It’s used for the overall decrease in buying power per unit of currency. Obviously prices do sometime come down.
I’m curious to see whether companies will actually reduce prices back to the norm after the bubble pops tbh. Historically, inflation only goes one way.
Inflation only goes one way because deflation isn’t really good. It creates a situation where not spending money nets a return. Inflation means you need to spend or you lose value. The ideal is wages keep up with inflation (which they aren’t).
Now, I don’t really buy into the Keynesian economics idea like I used to, that forcing spending is a good thing for the economy. Yeah, it boosts economic activity, but does that net really help the average person or only the elites? However, I still think deflation, especially to any significant degree, is almost certainly bad. It would cripple economic activity, which would cost jobs, because the best thing you could do is spend as little as possible.
However, computer hardware prices aren’t really inflation. They effect the measure of inflation, but they aren’t caused by it. They’re caused by incredible demand, and a lack of supply. There’s some inflationary effect to it, but their price has increased far faster than the price of their inputs.
Well whatever the reasons/terminology, it doesn’t change the fact that people simply can’t afford to spend ridiculous amounts on luxury/optional purchases. I know a lot of people across the U.S. who are choosing between food and rent. As for myself, I’m a disabled veteran and only get so much in disability per month. With my wife being laid off, I have exactly enough to pay rent and buy groceries every month and that’s about it. I understand what you’re saying, but unless people’s wages are actually adjusted for this new economy, these companies are going to lose money. It’s not a matter of want, it’s a matter of literally not having the money to spend.
Yeah, that’s the key. (A small amount of) Inflation is potentially a net good thing, but only if incomes keep up. As it is, incomes are effectively being reduced, because they aren’t increasing at the same rate as inflation. People are able to afford to spend less and less, while all the wealth is funneled to a select few.
Eventually this has to effectively freeze the economy, because people literally will not have money to spend. The economy only functions if most people are spending money. Having more billionaires (or trillionaires now) does not create much spending, and does not make a healthy economy.
This is all hanging on the word “inflation” in his comment, which wasn’t really referring to general inflation like you are. It was clearly restrained to computer equipment, where the current bubble is.
Maybe. Generally when people use the phrase “inflation only goes one way” they’re talking about general inflation. Inflation is rarely used to mean price increases. It’s used for the overall decrease in buying power per unit of currency. Obviously prices do sometime come down.