USD Strength May Mean Deflation
Day 679, 18:35
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Published in USA 
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by
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by Henry Baragh VIII
The USD Strengthens On All Fronts
As a follow up on my previous article regarding the gaining strength of the USD against GOL
Deflation
Deflation, or, the widespread falling of prices in the marketplace, is something most consumers will think of as good news at first. However, General Managers are feeling the pinch. Deflation means prices for raw materials today are more expensive than they will be tomorrow, and the price of products sold are also dropping. As salaries are less liquid than the price of materials, the real challenge is paying the same numerical salary tomorrow, when the USD is worth more.
If the deflation remains long term, then more businesses will be forced to close due to labor costs. Those businesses that survive or the new ones that follow will not be offering the same high salaries as businesses today.
BOTTOM LINE:
The economy is either a boom or a bust. Hard to say.
As a follow up on my previous article regarding the gaining strength of the USD against GOL
😨it appears that the USD is growing against most measures. Prices in weapons and food have dropped following the drop in GOLD. The only question at this point is whether the price drops are short or long term.
Deflation
Deflation, or, the widespread falling of prices in the marketplace, is something most consumers will think of as good news at first. However, General Managers are feeling the pinch. Deflation means prices for raw materials today are more expensive than they will be tomorrow, and the price of products sold are also dropping. As salaries are less liquid than the price of materials, the real challenge is paying the same numerical salary tomorrow, when the USD is worth more.
If the deflation remains long term, then more businesses will be forced to close due to labor costs. Those businesses that survive or the new ones that follow will not be offering the same high salaries as businesses today.
BOTTOM LINE:
The economy is either a boom or a bust. Hard to say.
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Comments
Your "Bottom Line" says, "I have no clue", to me.
You have a good article, and your knowledge is accurate. What you don't have, though, is a long term perspective on the economy. Most of the living population can't remember, but the value of USD pre-war was maintained at 40 USD/Gold by the government. If the ratio goes lower than that, begin to worry. Otherwise, it's definitely a good sign.
-Drake
It was maintained at 50 USD/Gold from approximately the beginning of 2009... Before that it was 40 something.
@Emperor_Scorpious
You are correct.
@ Drake Koeth, rlee16807
Interesting to know. I am an eBaby.
I think you're right there, rlee. I've been around long enough to forget, certainly. 😛 Wouldn't be the first time.
Anyway, the general point stands that the economy's in much better shape now than recent times have seen.
-Drake