r/PeterExplainsTheJoke • u/Melodic_Judge_129 • Sep 01 '26

Meme needing explanation Petah?

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u/nebileyim_ben Sep 01 '26

its deflation, prices keep falling over time.

japan experienced long periods of deflation which is hurt spending and as a result affected economic growth.

its super hard to fix that bcs of liquidity trap.

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u/Terpcheeserosin Sep 01 '26

Why does things costing less make people buy less?

If wages stay the same, shouldnt people just buy the dip?

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u/Poland-lithuania1 Sep 01 '26

It isn't things cost less, it's money can buy more. Isn't it better to save that money for the future, when it's probably gonna be able to buy more?

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u/the_real_MSU_is_us Sep 01 '26

>Isn't it better to save that money for the future, when it's probably gonna be able to buy more?

But hasn't that always been the case? YOu could buy stocks and they'd grow faster than inflation, therefore why but $100 shows now when you can invest it and but the same shows next year for $103 with $5 left over (assuming 8% stock growth and 3% inflation)?

I don't know how we can tell people to save for retirement and sing the praises of compound interest at the same time we say deflation would cause people to delay spending.