Deflation is a monetary phenomenon.
If the money supply is static or shrinking (which is the case), then prices can only rise _overall_ by increasing monetary velocity. Usually by getting people to spend their savings.
Discussion
That is why they are all talking about "getting savings back into the economy" and "releasing savings to spur investment".
There's more than enough money in the system, to get prices to rise, but people are unwilling to spend it. So, they are trying to figure out how to make spending it more attractive than saving it.
Which means they won't have anything to support themselves in their old age making them dependent on the government. No thanks.
What?? If money supply shrinks, the money becomes more valuable. Prices of other things go down.. Monetary velocity may counter this a bit, but only temporarily.
We also have local politicans spout nonsense like “we’ll issue special bonds and get people to transfer their savings into gov bonds, since banks don’t give them any interest on their savings and gov bonds are awesome in comparison.” All savings are third-party managed assets already. Moving them from one spreadsheet to another is meaningless, but it all sounds like they have our best interests at hart, realy. 🤦♀️
Ah, but there's a method to the madness. If people sit on the savings, instead of spending it, then you transform those savings into a vehicle that the government can spend for them, and you hand them a government IOU and pay them higher interest, to make it more palatable.
I know. It just seems so transparent to me, that this is a play, that I have a hard time believing that anyone takes this at face value.
The people who would be unnerved by this have long since moved their savings out of the bank.
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Like using the savings money to arm the country to attack another and get some _lebensraum_?
That is the problem with central planning, they think that individuals making decisions about their own money for their particular situation is wrong. Too much money not doing anything? It is doing what it is supposed to, being there in case you need it or accumulation to purchase something expensive.
It is not theirs to take!
BOOM!
Ah, it is more complicated
