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To: AAABEST

Deflation is a decline in the speed of money.
Inflation is an increase in the speed of money.

Deflation in a credit-based based economy means a decrease in private credit availability, even if cash has increased.

We have deflation because less money is moving, e.g. fewer homes sold at lower prices than before.

So rents can go up in price due to less demand for purchasing housing and you still have deflation.

It’s not about prices per se, but about the overall speed of money and growth/shrinkage of credit availability.


36 posted on 08/13/2011 9:58:57 AM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
Deflation is a decline in the speed of money. Inflation is an increase in the speed of money. Finally. I read, and waited, and read, and waited for someone to boil it down to the real issue at hand. Bravo.
45 posted on 08/13/2011 11:49:06 AM PDT by ImaGraftedBranch (...By reading this, you've collapsed my wave function. Thanks.)
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