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  • Deflation Then Inflation

    by Founder on January 6, 2009

    in Current Politics, Government, Money/Finance, Voice of the People

    The title sums up what will occur because of our governments disastrous economic policy and current beliefs. Deflation is the decrease in the price of goods and services and Inflation is not the increase in prices but the increase in the amount of dollars it takes to buy your goods and services – each dollar is worth less and buys less.

    Right now our economy is entering the deflation phase. What is now happening? The consumer (you and me) is cutting back and not spending as much any more (something our government should do). The consumer is now being very careful about how they spend their hard earned money.

    Yet before all the problems really hit the fan back in October 2008, businesses had lots of product to sell. No matter what industry, America was flying high, producing massive amounts of goods and services for sale – so when the problems began to surface businesses were stocked full with product.

    Therefore while businesses were stocked to the gills with product to sell – at the same time the people stopped buying. So what do the businesses do to move their product? They lower prices. Companies are desperately trying to get rid of all the product that they have on their shelves and in their lots. Look at the deals today! Companies are just trying to sell their products – even if it means losing a little money – they just want to clear their inventories and get some money back.

    In the mean time, worldwide production is dramatically slowing. Companies are laying off people, Toyota is closing its doors for 11 straight days with nno production – no one is producing anything anymore – they are more concerened with selling what they have than adding more to their inventories. And this is why companies are lowering their prices in an attempt to move their product out the door.

    What happens after a few months of this and the products have been sold? The companies will began producing again to stock their shelves. But at the same time our government will be and has been pumping BILLIONS of dollars into the economy in the form of stimulus packages and so-called necessary bail outs. These government actions will have a disastrous effect on our economy – anyone with common sense and a basic understanding of economics can see this – but not our government.

    To look at an analogy – think of a tsunami. What happens? When a tsunami is coming the water receeds back to almost where you can’t see it – the farther it receeds the bigger the wave. When the water receeds it is just building up the strength of the tidal wave. Right now deflation represents the receeding of the water. And because government has been pumping so much worthless cash into the system – greatly diluting each dollars value  – the coming storm of inflation – the coming tidal wave of inflation – will rear its ugly head and crush this economy when it happens.

    The more money our government spends, prints and pumps into the economy – the bigger the wave – the bigger inflation – the bigger the future problem.Â

    What is my solution? For the government to immediately stop any type of stimulus package, stop any and all bail outs, immediately cut spending and begin paying down the current debt. Will all this happen? No. Will some of it happen? No. Will the tidal wave of inflation sweep across this country just like it was a real wave of water? Yes.

    Our current elected officials are very intent on proceeding with their massive spending policies – We the People must rise up and make our voices heard. if you disagree with our governments policies please stand with me and make your voice heard. One voice will not be heard – but if we stand in millions as one – we can make a difference and right this country’s sails once again. We must be the patriots and revolutionaries that make a difference.

    Defaltion is here and Inflation is next. Do your best to prepare, cut back expenses, save your money and put on your swim suit – there’s a tidal wave coming!

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