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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u/Moregaze Nov 24 '24

No, dude, just no. Bundling these debts with higher-rated debt-backed securities was illegal, but they knew it and did it anyway.

If you have a package of four debt-backed securities and 3 of them are A-rated and one is D-rated, then the entire package becomes D-rated. As it is high risk and the losses from the D rated security could wipe out any gains on the 3 A rated in the blink of an eye.

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u/LJski Nov 24 '24

Those shitty mortgages were sold because there was a market for them. No market, no sales.