As this coming Great Depression nears (See The Coming Recession–JohnHively.Wordpress.cm, the corporate press will want you to believe that deflation (a decrease in overall prices) is bad. Sometimes, and for some people, it will be. Deflation will deflate the current stock market bubble, and the current housing bubble. A lot of rich people are heavily invested in these two sectors. The rich folks are mainly invested in mortgage backed securities (bonds backed by outstanding mortgages). The more the big banks illegally manipulate housing prices upward, the more bonds can be sold to the rich. See The Big Banks Are Illegally Manipulating the House Prices Upward–JohnHively.Wordpress.com
By some estimates, an 8 percent decline in the value of houses sends the values of tens of trillions of dollars of mortgage backed securities plummeting to zero. That’s a bad thing for the rich, but a good thing for everybody else.
That’s tens of trillions of dollars the rich won’t have to corrupt your federal, state and local governments with. That’s tens of trillions of dollars the affluent won’t have to corrupt both major political parties. And when the values of stocks drop with deflation, for the same reason, that’s good too, at least for 99 percent of us.
Our spending power increases when the price of goods and services drop, especially if those things are made outside of the United States, which is where most US corporations manufacture their stuff.
Yes, there are some down sides to deflation for the rest of us. More corporations operating in the US are likely to lay off people. On the other hand, small business is the fastest growing sector for employment in the US, and these businesses are less likely to be impacted by deflation.
Just take a look at the recent deflation in the prices of oil and gasoline. That spurred the profits of the Airlines upward. That helped a lot of travelers of the 99 percent, but it hurt rich shareholders in the oil and gasoline industries. It also helped the rich shareholders in the airline industry.
Good things and bad things can occur with deflation. Most of the bad things will happen to the rich, especially to those who corrupt government, and use that corruption to rob from the 99 percent. So deflation can’t be all bad.
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