Why can’t prices just stay the same?

Don’t the prices stop if there’s 0 inflation, not fall?

You never justified why the cycles are inevitable, are they?

Watch how the economic machine works by ray dalio

These spirals do not work. We see inflation, but it's not leading to more jobs. On the contrary, we see more lay offs in companies, as it should be with deflation. Bigger prices, less jobs. We are living in a world where we can't afford to be alive.

Study Bitcoin and you will learn waaaay more about the current monetary system. A good book to start is “The Little Bitcoin Book”.

This is a good representation of the excuses made by politicians who wants to manipulate the economy.

Getting people to spend because of anticipated price increases instead of saving, may create demand, but it would be artificial and unsustainable. It ignores that when inflation becomes endemic and there is an expectation of wage increases, then that extra spending goes away and you a left with inflation.

The really bad deflationary spiral only happens when the manipulation have become too extreme and the market needs to correct the manipulators. That will always hurt. Its the correction that hurts, not deflation itself. Natural deflation is good as you can buy more with your wages. We know that when prices goes down on something and people expect it to continue, they will not hold of on buying it - if they did they will never buy and never benefit from the good the purchase brings them.

The idea that saving and not spending is bad for the economy is also false. Another way to describe saving instead of spending is investing instead of consuming. That is definitely not bad for an economy and the wealth of the population but the numbers may not look as good as the artificial numbers the manipulators desire.

Because debt is not 0%

So the whole thing evolves around the Idea that we need to encourage people to buy more stuff.
What if... we just let people buy stuff when they need it? Sure the current system would collapse, but who cares? Keeping a flawed system alive just to keep the flawed system alive isn't a good reasoning.

Inflation is a tax on currency denominated wealth. That's why governments, who can print that currency, like it.

Wrong.
There is nothing inherently good about currency losing value. Absolutely no one is thinking about inflation when deciding whether to buy something, and if they are, they’re thinking about how it was cheaper before, NOT how much more expensive it will be years from now. (The reason I’m buying this $150 appliance today instead of in two years is totally because in two years it will be like $156!)

The only thing inflation pushes people to do is invest in things that hardly need investors. Small businesses, startups, and projects receive investments from professional institutions(like banks) who have expertise and invest because it’s what they do for a living, not because of inflation. The average citizen who is just trying to beat inflation and save for retirement is most likely investing in blue chip major corporations that have little room to grow. So unless you’re ready to admit that those “evil greedy corporations” you hate so much really help the economy grow and really need our help, the argument that inflation increases investment doesn’t really account for much.
Inflation is nothing but a hidden tax.

Deflation comes with technological improvements. Most industrial goods get cheaper with time thanks to thousands of engineers working.

The central banks are so obsessed with keeping the inflation positive, that they incentivize pumping up the prices of others things that everyone needs but are always the same. That’s why healthcare, schools and housing are so expensive.

Inflation rates are an average of all prices. Stuff get’s cheaper, so the government makes life more expensive.

Stop the “Deflationary Spiral” Fallacy!

pumpy then dumpy

I feel like poor people buy more when prices are low. Nobody's waiting for prices to fall more. We go get it as soon as the first price drops. Why risk waiting. The middle class might spend less during deflation, not poor people

Because the fed wont allow us to

Everyone complaining about companies but it's govts printing money

You can think of it as a remote-control toy plane, which flies close to lake water. You can't fly at very low heights because of waves (similar to why you can't have 1 or 0% inflation). You're capable of controlling its height by a remote (Interest rate). BUT, when its wing dips into the lake, it starts to uncontrollably sink (-1 or even -3% deflation and its further uncontrollability). And the only way you can get it out is by help from another source, like a fisherman with a net (Total market control or a war).

As an economist, I'd like to point out flaws with such reports/strategies.
1) If prices rise and wages rise too, we end up spending more money to buy the same goods which is currency devaluation.
2) People plan for their long term purchases despite inflation. If you were to buy a car, you will not coz prices will rise later but coz you need it to move around.
3) Inflation is very good for firm profitability and dividend payouts since the shareholders spend the money before it's devaluation trickles down to the economy.
4) Interest rate hikes like the West did bring down inflation but cause recessionary pressures to the economy.
5) Credit allocation like the East Asians did bring down inflation while still spurring economic expansion via GDP expenditures rather than speculative ones such as cryptos, stocks, etc.

What an evil system

Crypto solves this

Sorry but this is all wrong. Prices are supposed to come down as we get better technology and efficiency. Big Screen tv is only a few hundred but used to be thousands. You work , you save and that money buys you more stuff later. not a bad thing. with inflation you trade your life for money that you can't save because it becomes worthless, you you have to gamble to keep up.

In light of the current economic trends indicating a potential downturn in the stock market and an impending recession, coupled with falling inflation rates, investors are advised to consider diversifying their portfolios. Exploring alternative assets such as gold and crypto trading would be a strategic move to hedge against the expected market volatility and inflationary pressures. This approach is crucial in navigating the complex financial landscape shaped by fluctuating Federal Reserve policies and the broader economic climate........Amidst this the insights of a knowledgeable guide like Kerrie Farrell can be crucial. Her expertise in navigating the nuances of cryptocurrency investments has been the key to understanding and making the most of these emerging financial trends...managed to grow a nest egg of around 4 b,tc to a decent 21 b,tc in the space of a few months....

Actually a really good video and just goes to show how much big companies focusing on profit hurts everyone

Will you build your carrier and work very hard, get more responsibilities without having a raise?
If yes, then sure price can stay the same.

bc free trading exists

why was the ad I got for this video this exact video

Inflation is the expansion of the monetary base by the government (printing money).
Governments justify their actions in times of crisis by offering bailouts, stimulus, or by passing "recovery plans", but they also do it a lot to finance wars.
Nowadays, they expanded the scope of the money printing to pay all sorts of entitlements as well as to support the stock market always going up.
That's the problem with governments and central banks.
It's just too easy to print money and let everybody feel good on the short term while they get reelected, but they always blame someone else for prices going up.

So wait... you explained the advantages and disadvantages of inflation. You went over what happens with deflation. What's the deal if prices stay the same? Why can't prices stay the same?

To increase inflation all the central bank has to do is to print money, then hand them over to the government to finance public spending.

So close. You didn't take the next step and actually explain why though

This video is mostly incorrect assumptions based on the failed economic theories known as "Keynesian economics."

That is what is happening in China: deflation. Nobody is buying Chinese EVs in China, which is why they are dumping EVs in Europe and other places.

deflation is what tesla is going through right now

The central banks somehow never get anything right. Put too much money into the economy, lower interest rates too long, raise interest too late and too fast, lower interest rates too late. Wait until stuff starts to break before doing what’s needed. Somehow whenever they do anything it always causes more wealth to move to the rich.

Deflation is not always so difficult to fix, it’s just in a way that people don’t like to hear because they think government spending is bad no matter what but it would create more demand. Demand exceeding supply (too many dollars and too few goods and all that) can cause inflation, whether that’s due to an increase in demand without the appropriate increase in demand or a decrease in supply as happens in, say, a pandemic. Demand dropping can lead to deflation, but increasing demand can address that. Add more dollars to increase demand.

I mean, I get this is a US based channel, but you half do data from other countries / zones, then only hyper focus on the US. Wouldn't it be good to keep up a wider data/information

Is there a way to remove the last rubber band and replace it with a plastic spring printed directly on the plate?

Easy answer govt like to spend

Explain Japan.

inflation = profit = dividends and growth

God forbid prices falling, because muh spending and democracy

how come just printing more money fix deflation spirals??!

did anyone else get an ad for this video before this video played?

Wait, did I just get an ad for the first 15 seconds of this video?

"The cost of deflation is really high and that's something that WE want to avoid." Who is "WE" and wasn't the great depression instigated by bad policies (e.g. Smoot–Hawley Tariff Act), speculation without regulation and issues with the gold-standard?

WHY WAS THERE AN AD FOR THE VIDEO JUST BEFORE THE VIDEO WHAT

Trucking is still paying old wages. There was a pick in 20 to 21, but now they are back to 2010

Isn't the quality of life good in Japan? Was all that deflation really so bad?

Incomplete information.

Also when you issue debt in your own currency inflation dilute that debt

Excellent effort in explaining what economists describe as virtuous inflation, but it still feels suspiciously similar to a Ponzi scheme 🤔