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Re: Re: Re: Re: Re: Fifty Year Ago Cost
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Posted by Bill Smith on February 25, 2004 at 19:33:20 from (63.147.130.9):
In Reply to: Re: Re: Re: Re: Fifty Year Ago Cost posted by Steve from Mo on February 25, 2004 at 12:48:41:
Couple of points on deflation. It happened after (stock market crash 29). Alot of people without money. Those that had it wound up sooner or later withdrawing it from bank. Banks didn't have it all (it was loaned out). Banks had to foreclose. Sometimes getting 10cents to the dollar. Some cases, the bank passed it on and people got 10cents to the dollar if they withdrew there money from bank. It happened again in a situation in the early 80's. Land got sky high and so did interests rates. Land prices went back down. Those that took out loans on high priced land basically went broke. They couldn't even sell the land to get out of it. As for inflation rates being low right now, just wait untill the next minimum wage hike. Chain effect on inflation. All employers will eventually award the raise to employees. Cost of products goes up. Cost of living goes up. And when cost of living goes up, even the jobless will see raises through welfare, disability, unemployment, and so on. It's all one big dang chain effect. To be honest with you, I can see the 30's maybe happening again, but if so I believe it would be different even if under the same circumstances. I kind of don't get what you mean by number of jobless having something to do with deflation. I mean I can see where it would maybe help deflation get worse, but can't really see where it would be a direct cause. The direct cause for it in the 30's was stock market crash followed by really bad years in economy and farming. The direct cause on the land in the early 80's was moreless interests rates.
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