Deflation May be Next Instead of Continued Inflation

Aug 15, 2023

Show Description: China's economy is experiencing deflation. Prices are dropping on food, consumer products, and commodities. The causes for the price drops include housing value downturn, lower exports, and high unemployment. China's government pursued aggressive economic stimulus after the COVID lockdowns. This has caused a higher debt burden to GDP than the United States. 

 

China is not an example to follow, but a warning of what not to do economically. Central planners typically think they can control economic cycles. Economic cycles are affected by many more factors than a small group of economists or government officials can understand. They are not able to control cycles. They can only delay the inevitable. The longer you delay a correction, the worse the result. It is like trying to hold a beach ball underwater. You may be able to for a while, but eventually you will get tired and it will rush to the surface, often violently.

 

Economic recessions are healthy for an economy. They wash out the excesses. The best thing the government could do is get out of the way and allow the free market to correct the extreme ranges. Until then, we will swing wildly from one end of the spectrum economically to the other.

 

Staying nimble to take advantage of opportunities is one of the best things you can do with your money through economic swings. You want to be able to quickly access your money without taking market losses, taxes, or penalties. When bad economic news hits, the stock market often reacts too quickly to avoid losses. Having some of your money guaranteed and liquid protects you from the volatility.

 

 Your Personal Bank is highly liquid, provides guarantees, and can be accessed income tax-free. This gives you the ability to quickly take advantage of opportunities when they present themselves.

 

Contact Ferenc at YourPersonBank.com or 866-268-4422 for more info.