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<p>[QUOTE=&quot;NorthKorea, post: 1594955, member: 29643&quot;]Umm, deflation is GOOD for bankers and bad for most everyone else. When there is deflation, interest rates drop, and bankers make more on existing loans (assuming they don&#039;t default). Additionally, during periods of deflation, people pay banks a premium to hold their money. Deflation is bad for most people, since they don&#039;t have adequate resources to take advantage of the situation.</p><p><br /></p><p>Let&#039;s say the dollar strengthens significantly (say 50% deflation -- which would never happen, but it makes the math easier for the sake of argument). If $5 used to buy a half gallon of milk or a loaf of bread, it would now buy twice that. Businesses would make less per sale, and if they kept any sort of inventory on hand, they&#039;d be taking a loss on each sale. As a result, many businesses will be forced to shutdown operations. Those businesses that are able to survive in the new economy would have almost no need for high cost labor. As such, wages would go down. When wages go down, consumption will also go down. When consumption goes down, businesses will see their revenues shrink further. This creates runaway deflation.</p><p><br /></p><p>On an aside, Inflexion, my point wasn&#039;t that PMs as a whole would hold no value. I intended moreso to assert that without a consumption based demand for specific PMs, we wouldn&#039;t know which ones would hold greater value in times of long-term runaway inflation. (I feign to call it hyperinflation, as the idea of hyperinflation is based upon a micro- situation, and I&#039;m trying to present a long-term macro debasement of all fiat.) This is similar to how silver and salt used to trade at significant premiums to where they stand today.</p><p><br /></p><p>For example, look at platinum/gold/silver eagles.</p><p><br /></p><p>$100 in platinum bullion = $1605</p><p>$100 in gold = $3396.20</p><p>$100 in silver = $3228</p><p><br /></p><p>In the current economic situation, gold and silver trade at significant premiums to platinum, due to the decrease in catalytic converter production.</p><p><br /></p><p>1992 $100 platinum was worth around $375 (1992 USD)</p><p>Mar 2004 $100 platinum was worth around $900 (2004 USD)</p><p>Feb 2008 $100 platinum was worth around $2150 (2008 USD)</p><p>Dec 2008 $100 platinum was worth around $800 (2008 USD)</p><p><br /></p><p>1995 $100 gold was worth around $800 (1995 USD)</p><p>Mar 2004 $100 gold was worth around $900 (2004 USD)</p><p>Feb 2008 $100 gold was worth around $2000 (2008 USD)</p><p>Dec 2008 $100 gold was worth around $1500 (2008 USD)</p><p><br /></p><p>1995 $100 silver was worth around $500 (1995 USD)</p><p>Mar 2004 $100 silver was worth around $750 (2004 USD)</p><p>Feb 2008 $100 silver was worth around $2050 (2008 USD)</p><p>Dec 2008 $100 silver was worth around $925 (2008 USD)</p><p><br /></p><p>Note: Fatima has joined Detecto on my ignore list. I see no point with arguing ANYTHING with someone who doesn&#039;t have the decency to at least do some research before spouting off.[/QUOTE]</p><p><br /></p>

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