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Deflation is about prices going down.

That’s not a GOOD thing – because when prices go down – it means that there is LESS MONEY in the SYSTEM.  People also tend to spend less – since, well – prices will be CHEAPER the following day. Less money spent, fewer profits for businesses and that leads to more job cuts… which means even LESS money in the system, driving prices even LOWER.

Credit dries up – mostly because people are afraid that the money lent – won’t come back at all (let alone with interest!)

Roosevelt solved this problem by trying to re-inflate the economy using Keynesian principles – and by going off the gold standard. But America has been OFF gold since 1971. And printing more money – not backed by gold – doesn’t do much of anything. The system that controls inflation – is broken – FUNDAMENTALLY.

We seem to be breaking more than one system at a time. Over-fishing and illegal whaling have driven ocean life to the brink of extinction as well. Once these resources are gone, they are not coming back – at least not for the next several million years or so – after we have destroyed ourselves and our civilizations.

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