Inflation or Deflation?

Digital Empire

Going to be honest. I understand a bit about these two things, about as much as a normal person could, given what is available to read on the web. The discussion on this is pretty big. Normal people like you and me, and not just the economists, are talking about inflation. Generally, people believe that we are in an inflation period, but some people are also saying that there will be deflation…after a market collapse! It sounds a bit scary because I’m familiar with inflation, but I have no clue what deflation can do to a society.

Central banks control the value of currency by selling and buying bonds. For example:

The central bank sells treasury bonds to Microsoft. Cash goes to the central bank to be stored or destroyed. This takes the money out of circulation and therefore decreases the “money supply.” Deflation.

Microsoft sells treasury bonds back to…

View original post 507 more words

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.