Comments by "DrScopeify" (@drscopeify) on "Fed risks an 'overshoot' on rate hikes, increasing chances of deep recession, says Diane Swonk" video.

  1. Deflation is a trap which can tear apart an economy this is named "deflationary spiral". Why is that? Well imagine if every day you look at buying a car yet the price keeps falling, 25,000 24500 24000 23500 you get the picture? Prices keep falling day after day year after year so people just stop buying anything and as people stop burying, companies shrink down and collapse, banks fail,, income and salaries shrink drastically and so you avoid buying even more so. The last time the USA had a deflationary spiral was during the Great Depression. Due to this risk most central banks have a set inflation level of 2% to maintain distance above deflation and also to erase old money and get people to go out and work but that's another story.
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