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<p>[QUOTE=&quot;medoraman, post: 948445, member: 26302&quot;]Low inflation is hard to beat? Heck, the US sells bonds that pay inflation plus a small interest rate. Buy them and you always beat inflation. You have to remember most Americans are heavily in debt, therefor deflation is incredibly burdensome to them. I am not talking about credit cards, but mortgages. By advocating deflation, you would put most houses out of reach because every year the payments would become harder and harder to make since the dollar goes up in value. With inflation, every year the payments become easier. What do you think that would do to the economy? We have just went through just a fraction of the destruction we would see in the housing industry if we had deflation.</p><p>&nbsp;</p><p>Like I said, do not use Japan as your deflationary model. Look at the US in the 1890&#039;s. The farmers were most affected, since most Americans did not have mortgages. Look at that model instead, and then take the farmer&#039;s plight and spread it to 90% of Americans today. You say people can make money by doing nothing in deflation, but you forget that almost all wealth people own is NOT cash, but assets. By doing nothing in deflation you lose every year. How much of your wealth is in cash versus your home, coins, cars, stocks, etc?</p><p>&nbsp;</p><p>Sorry but concentrating on balance sheets shows you how older Americans who own their home and simply want to preserve their lifetime of wealth would fare, (even then they would have to be all cash for investments). It is ignoring everyone else who is trying to build lifetime wealth or simply trying to live. Balance sheets are a result of, not a driver of, economic activity, and to the extent your balance sheet is not cash or bonds, you lose in deflation.[/QUOTE]</p><p><br /></p>

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