Erik The Decentralist on Nostr: "Inflation is falling = prices are rising more slowly." It’s like a car driving at ...
"Inflation is falling = prices are rising more slowly."
It’s like a car driving at 60mph. You are moving forward sixty miles every hour. (Prices rising 3% every year) If you slam on the gas, your speed increases to 80mph (prices now rising 6% every year).
But, unknowingly for you, the mechanic sabotaged your speedometer, meaning that you're REAL SPEED is 120mph ( prices ACTUALLY RISING at 13% per year).
But then you slam on the brakes and your speed decreases...
BUT.... you’re still moving forward.
Yes, you maybe decelerating, but you haven't stopped and you're definitely not in reverse (Prices still rising, but at a slower pace than before - disinflation)
Next you come to a stop and your speed is now 0mph - neither moving forward or backward. (The rate of inflation at 0%, prices not going up or down).
If you put it in reverse, you are now moving backwards. (Prices falling - deflation).
It’s like a car driving at 60mph. You are moving forward sixty miles every hour. (Prices rising 3% every year) If you slam on the gas, your speed increases to 80mph (prices now rising 6% every year).
But, unknowingly for you, the mechanic sabotaged your speedometer, meaning that you're REAL SPEED is 120mph ( prices ACTUALLY RISING at 13% per year).
But then you slam on the brakes and your speed decreases...
BUT.... you’re still moving forward.
Yes, you maybe decelerating, but you haven't stopped and you're definitely not in reverse (Prices still rising, but at a slower pace than before - disinflation)
Next you come to a stop and your speed is now 0mph - neither moving forward or backward. (The rate of inflation at 0%, prices not going up or down).
If you put it in reverse, you are now moving backwards. (Prices falling - deflation).