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inflation and deflation, overall affect

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dsailer posted on Mon, Oct 29 2012 7:37 AM

I'm trying to understand the overall affect these two forces have. Much of what is written out there only covers one perspective. For example "inflation hurts consumers". Sure, but if I'm massively in debt it helps me. I've also read that deflation hurts banks. That I don't get because they are getting paid the same number of dollars on their debt while their value is going up. Also, deflation in sense helps everyone because we are all consumers while inflation does the opposite.

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Just to make sure, you mean the price inflation, not the monetary inflation, right?

Mainstream tends to default to the former, while austrians to the latter, when using plain "inflation" term.

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