Difference Between Deflation And Depression

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Deflation Deflation is a term defining an economy’s reduction in the general levels of price. It has been a challenge even to the most brilliant of minds everywhere in the world including federal reserves, Wall Street’s smartest traders, as well as millions of investors, whose strategies are shaken due to this. And until now, all those that are involved in the most important and life changing decisions, none has an experience when it comes to the deep inflation’s lengthy period that happened in the 1930’s in America. No charts, books, or even numbers have managed to describe the times as they truly were. As such, people have mistaken beliefs about the great deflation that took place in America during the 1930’s. Some of these beliefs include:…show more content…
However, they at times go hand in hand and at other times, they do not. Deflation is actually good for gold as opposed to people’s belief that it is bad. Owning gold during the time of deflation in America was like “hitting the jackpot”, as people often say. The value of gold appreciated, and anyone who went to sell or trade in theirs was sure to get double or more the amount they had bought or traded it for. Since most people used the gold bars to buy shares, their dividends would of double, redouble, and double again. America’s deflation did not start in the year 1929 due to a crash in the stock market as many people have been led to believe. Actually, it started in the early 1920’s and went on for the most part of the decade. Similarly, the 1920’s first fortune bursting crush did not happen in the Dow, neither was it in New York. It happened in Florida in the year 1925-1926 and was known as the Florida real estate crash. The popular “roaring twenties” was not everyone’s roar. Though industrial elites and Wall Street were making a lot of money, families in the rural areas were sinking into…show more content…
However, there were huge, deep, and lengthy deflations that took place throughout the 14th century in the 1860’s, 70’s, 1910’s, 20’s, and the 30’s. The deflations that took place during these years were not as a result of distinctive geo-political events or serious mistakes in the policy. They were as a result of natural economic occurrences that took place in different times, under political conditions that were quite different, and triggered by different causes. Some major examples include: • The 14th Century deflation: In the years that followed the 1315-1357, Great Famine, the United Kingdom suffered a serious deflation that resulted to the output crush in the English mint. • The 1658-1669 Deflation: Political crisis was a major cause of this deflation. • The Late 19th Century Deflation: This deflation was as a result of two main causes. Firstly, an abnormal rise in productivity, and secondly, monetary and fiscal disciplines as numerous key countries came together to join the gold
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