hitmyspot, 1 year ago

If deflation was 1%, it means the prices of everything is dropping. It means that waiting to buy something means you’ll save money, so you wait and don’t buy. So they have to drop the price to sell more so they can restock. But then people wait more and buy less. So they start making less. So they need less workers. So they let people to. So people can afford less, so they buy less. So prices drop. So they let people go. Etc etc.

What you are talking about is a recession. It’s not favourable to rich or poor, but the poor will suffer more as the rich can afford their basic needs whether there is inflation or deflation.