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What's more likely now: inflation or deflation? Why?
I see some people think the current problems will cause inflation or even make the dollar worthless. I think just the opposite is a more likely threat.
Thou?
3 Answers
- 1 decade agoFavorite Answer
Though some prices will probably fall (fuels, cars, houses), generalized deflation seems quite unlikely. This is so because a good deal of the price increases that we have been seeing recently is an indirect effect of overseas inflation. For most of the products affected by this process, the US is a price taker, which means that domestic events should not affect the price of these products. Anyone thinking otherwise would have to show that the crisis will lead to lower demand of these products worldwide, something difficult to believe at least in the short-run.
Most probably we will see that price increases will slow down a bit, but they will remain in the plus side (inflation).
- ChucklesLv 71 decade ago
Deflation in the short term but inflation in the longer term as all the stimulus kicks in.
- Anonymous1 decade ago
cheap junk from china and food will increase in prices. prices on the consumer should mostly go up, but asset prices will drop due to increase in leverage costs
