The Incredible Shrinking Dollar - Freedom News Hour

[GWEBITYALA]

I'm not sure that the answer is this simple. Deflation is not good if you've got a mortgage. In fact, inflation is your friend if you've got a mortgage. Also, if the volume of goods keep expanding but money supply remains constant, no one will ever gain increased purchasing power, because what I'm selling, i.e. my labour, will also reduce in price. So my salary will decrease in the same proportion as general deflation.

[Parture]

The one thing I didn't agree with was when he said banks shouldn't lend money out that you put on deposit. I don't think that's the problem. The multiplier effect is a useful tool except it should be something manageable like 10 to 1 not 50 to 1 which some banks were leveraged.

[Parture]

Deflation is a good thing.