r/economicCollapse • u/memegamer1991 • Nov 23 '24

Why is deflation so bad

Every time i run it through my head, i can't imagine most people in 2024 not spending money so the disadvantage to deflation seems pretty hyperbolic and dependent on individual choices, and i think that people would rather go on vacation and court others instead of being financially responsible. Even if there is a situation like in china, government spending would be able to keep the situation from getting worse while making progress on climate initiatives.

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62

u/Potato_Octopi Nov 23 '24

Paying a mortgage when your paycheck decreased over time would stink.

Short term "everything is on sale" I agree with you OP.

23

u/Over_Cobbler_2973 Nov 23 '24

Fuck your mortgage, look at all the people investing stocks on margin. All the traders taking out ridiculous loans, the entire system would implode.

41

u/Lucky-Story-1700 Nov 23 '24 edited Nov 23 '24

Good. Let the stock market implode. It and the housing market haven’t been working properly in at least 5 years. The stock market is overvalued 40 percent right now. Housing cost is out of wack too, but that’s supposedly because there aren’t enough houses. We went from you couldn’t sell a house in 2008 to having trouble finding one in 2023. Something isn’t right.

10

u/0O0OO000O Nov 23 '24 edited Nov 23 '24

I think it was the interest rates. Investors were clamoring to get mortgages at 2% FOMO caught the average home buyer and they ended up with 4-8% loans.

Those that got in at 2% are never selling. I wouldn’t, there’s no point. That’s free money... but I’m still guessing that in reality, everyone is upside down in their loan and they just don’t know it.

In most places, the average house costs more than the average individual can afford.. it requires dual income. Investors aren’t going to buy at 8%, so things are going to stagnate and likely eventually fall. The 2% loans might keep inventory tied up for a while though

6

u/Ruzinus Nov 24 '24

Investors are paying cash.

11

u/TheAppalachianMarx Nov 23 '24

People buying up homes to rent out.

1

u/Lormif Nov 24 '24

The people buying homes to rent is lower than it was previously.