r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 9h ago

Meme needing explanation Petah?

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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/Gentle_Snail 8h ago edited 8h ago

Deflation can also result in a very negative feedback loop, the Great Depression was a deflation spiral for example.

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u/Mayor_Death 7h ago

Is deflation a cause or symptom, though? To me, it’s just a number, but I understand that it is more than that to various economic groups.

As far as I understand it, deflation indicates that prices are going down, which is a good thing to me individually.

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u/Manzhah 2h ago

Every financial transaction is two way street. Sure, lower prices might be hood for ypu as a buyer but it's bad for the seller. And in modern economy nobody is just a buyer or a seller. Most people earn a wage from companies that sell stuff. When sellers start losing money, then they can't pay wages to people, so they can't buy stuff, so even more sellers can't pay their wages and so on. Deflation, same as high inflation and other price shocks, can easily lead to a downward spiral.