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what are indicators of deflation before it hits?
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<p>[QUOTE="medoraman, post: 963814, member: 26302"]Well deflation happens in food all the time. Prices go down with large harvests. For rent, we experienced that during the housing boom when landlords could not get tenants. They started offering 2 or 3 months free rent, then started discounting rent to existing tenants around here if you threatened to move. 2 for one or any other type of sale is effectively deflation since it is lowering of the real cost of the goods. Entertainment is volume sensitive, if you started seeing 40-50% decreases of people attending movies I would bet ticket prices would lower, not increase. They would have less money to make the movies, but that is part of the deflationary spiral as well.</p><p><br /></p><p>Deflation can happen, and parts of it happen so regularly we simply do not recognize it. System wide deflation would appear like these examples listed, but overall would be brutal. Honestly, it is very litle risk though, unless all of the governments start, (continue), to do something really stupid.[/QUOTE]</p><p><br /></p>
[QUOTE="medoraman, post: 963814, member: 26302"]Well deflation happens in food all the time. Prices go down with large harvests. For rent, we experienced that during the housing boom when landlords could not get tenants. They started offering 2 or 3 months free rent, then started discounting rent to existing tenants around here if you threatened to move. 2 for one or any other type of sale is effectively deflation since it is lowering of the real cost of the goods. Entertainment is volume sensitive, if you started seeing 40-50% decreases of people attending movies I would bet ticket prices would lower, not increase. They would have less money to make the movies, but that is part of the deflationary spiral as well. Deflation can happen, and parts of it happen so regularly we simply do not recognize it. System wide deflation would appear like these examples listed, but overall would be brutal. Honestly, it is very litle risk though, unless all of the governments start, (continue), to do something really stupid.[/QUOTE]
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