r/PeterExplainsTheJoke 9h ago

Meme needing explanation Petah?

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u/thevoidthatjerksback 8h ago

I doubt that anyone could explain this in a way where I would accept deflation as worse

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u/IrksomFlotsom 8h ago

Try and think of our global system as an engine that's purpose is to make fuel for itself. It needs to keep it's input above the output in order to keep powered on. As soon as the input drops below output the machine starts to slow down and can no longer sustain itself. The engine is not designed to slow down so it very quickly breaks down

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u/Aldrik90 8h ago

How is a drop in prices equivalent to a lack of fuel?

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u/pchlster 7h ago

Imagine a company doesn't just fail to make as much as they wanted but are actively losing money. First thing they'll do is lay people off. We've now got a bunch of people who will try to save what they have left, rather than spend it. So other companies follow our first one and we get even more people trying to not spend money and the cycle continues in a negative spiral until, at some point, no one even trusts money to have any value anymore. And that's when either we revert to a barter economy or wait for a different, strong economy to drop on by to give a hand.

The flow of money is how the economy works; money that doesn't change hands is pointless.