Will the US (and the World) Economy be destroyed by Inflation or Deflation?

Question

Inflation: increase in money supply, and a cause of higher prices in products.
Deflation: decrease in money supply, and a cause of lower prices in products.

Inflation reduces the purchasing power of money. You pay more for the same product. Savers lose, because their money buys less. People have to borrow money to buy things. Economy runs on debt. Poor people suffer most, since their limited amount of money can buy less and less. Middle class shrinks as they drown in debt and go bankrupt. Banks have to lend more money to keep the economy rolling. More debt causes more bankruptcies. This creates an inflationary spiral.

Deflation increases the purchasing power of money. People hoard money and borrow less. Economy takes a nose-dive because people don't spend as much money. Unemployment increases. Many jobless people roam the country. This creates even less people spending money. The country goes into a deflationary spiral

Answer 1

In small ranges, neither inflation, nor deflation will cause significant damage to a national economy. The real danger is stagflation. When prices are rising yet productivity and living standards are falling. it is a combination of inflation and stagnation,caused by many independent factors combining to tilt an economy out of control. the increases in raw food staples due to the restriction in food growing lands in a knee-jerk reaction to anthropogenic global warming and the oil companies buying up huge stocks of land to grow fuel on (fuel whose processing leaves a larger carbon footprint than conventional processing of oil) means that there is less land to grow food on = less food = higher prices. Add this t interest rises in the, high risk markets and inflation is taking off. this links into higher bankruptsies and forclosures and these are the seeds of stagflation.

Answer 2

Sorry I did'nt read the whole detail. But an economy should be balanced in order to keep the lives busy.
Any economy will be destroyed by higher inflation and deflation would make things of no value.

Answer 3

According to the basic laws of supply and demand

Neither.

In the case of runaway inflation. Demand decreases. People will stop buying things. People will be unemployed. Excess Money will vanish and prices will fall. Because all goods and services have value, new currencies will be found if paper money has no value. Foreign currency might be used. Gold, silver.

In the case of Deflation. Demand increases. Goods become relatively less expensive. Consumption of goods rises since money buys more. When demand increases, that end of the equation drives prices up.

Answer 4

Economic theory is just that: theory. Theory almost never crosses over into real life, as evidenced by the theory of evolution and meteorological theory that states that down-sloping wind causes a warm up and falling precipitation also increases temperature. In real life, neither happens except for rare occurences.
What will destroy our economy, and hence the world economy, is the Chinese, whether or not deliberately on their part.
After all, when a country keeps having a negative balance of trade, things WILL go down the tubes.
Besides, inflation is created by the Government; their rationale is that, with increasing population, and inflation, whatever monies they borrow will be repaid in deflated monies by an increasing number of people!
As to the world economy: the U.S. comprises 28% of the entire world economy. WE are responsible for the trade alliances and trade routes. We are less than 1/20th of the world population, but have more than 1/4 of all wealth. Before, they said, "As Rome goes, so goes the world". Now it is the U.S.

Answer 5

Probably deflation. Inflation can be controlled while deflation once it gets in a groove it is hard to stop because many consumers will hold off on buying items to see if they can buy it when the price has bottomed out, which is a slippery slope because usually when the price bottoms out it is when the company is going out of business.

Answer 6

Our present fiat money system must and will crash in the very near future, to make way for the NEW global banking system that is to go into effect very soon afterwards. The FRNs you are holding are in fact worthless and have been for a very long time. It's because our "money" is NOT REAL, and has NO real value because it's NOT backed by precious metals--only oil and the "faith of the U.S. govt." What a joke!

Answer 7

the place did you discover a replica of that racist trash, The Protocols of The Elders of Zion? contained in the 1st place, no longer one among them has ever pronounced something remotely Zionist. contained in the 2nd place, seem on the information of those sterling Gentiles Bush, Cheney, Rehnquist, Rumsfeld, and Gonzales. No Jew has ever been President and completed such injury to the financial gadget that those human beings and Reagan did.

Answer 8

INflation

Answer 9

Have you been reading Robert Frost?

Fire And Ice
by Robert Frost

Some say the world will end in fire;
Some say in ice.
From what I've tasted of desire
I hold with those who favor fire.
But if it had to perish twice,
I think I know enough of hate
To know that for destruction ice
Is also great
And would suffice.

Answer 10

Probably inflation.