Are we in a Deflationary Spiral?

[scroobal]

A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price. Since reductions in general price level are called deflation, a deflationary spiral is when reductions in price lead to a vicious circle, where a problem exacerbates its own cause. The Great Depression was regarded as a deflationary spiral.
Brace yourself brothers and sisters.

You are right and very well articulated. What started as possible stagflation with inflationary pressures as result of commodity prices rising only a few months ago has made a complete u-turn. Central Banks which began raising rates at the start of the year and now making massive rate cuts.

Interestinglt SDP TBT 19 protest where the trial is going on was for the inflationary pressures which now has completely disappeared.

The big difference with the Great Depression is that the central banks are reducing rates, injecting cash into the system but the big question is whether it will kick-start the economies of the world.

We are all on a rollercoster ride with no end at the moment.

The Chinese Government is now worried politically as thousands of factories are being shut down as contracts are cancelled, not honoured etc and people in the cities can't sustain themselves. With their trillions in reserves, they might embark on another Great Wall project to keep people employed and happy. We might end up with a 9th wonder of the world.

 

[Einfield]

talking about deflationary spiral? we entered into that phase ever since the 90's, just that not many saw it coming. the initial phase was a very gentle spiral, after the millenium, the spiral became steeper.... now without much substance to hold, the spiral is nothing by a sharp fall.

With our local property price peaking at $3K+ per square feet just a few months ago, this is inflation. Now it's at 1/2 the price or less.

We recovered from the 90s financial slump because it is not on a Global scale, the rest of the world still have strong demand for goods and services, but this round, everyone is hit.

 

[lubehsong]

expect daily mrt delays in the coming months

 

[suteerak1099]

do the math, 20-30 yrs loans for an overpriced prison cell that makes us indebted to the banks, slave ourselves to furnish that pathetic housing, and depriving ourselves of a well deserved retirement.

given that kind of circumstance, its no wonder y many r packing n leaving this modern well disguised slump.

 

[suteerak1099]

expect daily mrt delays in the coming months

in lieu of the rising demands, we will see MRTs lined up like a conveyor belt. in time to come, they might just scrap the trains & convert all train tracks to become travellators to cut operation cost.