Quote:
Originally Posted by daepp
I was thinking more along the lines of lots of demand:
- but mass production/increased efficiencies/miniaturization
AND
- cheap foreign labor
have kept price growth (inflation) down, despite unbelievable buying and printing by Feds..
Thoughts?
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Lets keep it simple..
50000 tv sets produced will sell for 1000 ea
100000 tv set unit cost goes down and sell for 750
This is if the Demand coefficient remains constant. Thus the Global Economy Of Scale. To keep Demand constant..the consumer was given credit starting in the 80s as the consumer ran out of cash and wages became stagnant that credit regime blew up in 08.
If the Demand coefficient changes where the consumer is not making as much has no credit or is out of work
Then those 100000 tv sets produced to entice the buyer will have to be reduced in price to 600. And you have Deflation.
Conversely if Demand should go up those 100000 tv sets will go up in price.
If your currency should suddenly decline in value to the mfgs currency ..then the tv sets will go up in price.
Since 08 consumer Demand has been weak...and prices started to decline...buy 2 get one for free.
The FED printed currency in order to devalue the $ so prices should have gone up. But Consumer Demand has been weak so prices without the FEDs devaluation should have gone down. But with $ devaluation prices stayed more or less constant.
Now with apx 35% unemployment Demand is just about zilch and a massive deflation should take place...but the FED printed Trillions just to keep the Banks open and the economy stable..prices are about constant except for high demand items..
They are not selling ANY CARS..to speak of..so they are offering zero interest for 6 years, no payments for a year and free registration..that is in fact a thinly disguised DEFLATION.
Guns & Ammo are in great Demand as people are scared so prices on Ammo .have about doubled..