What to do if deflation is coming?

Here are some points for consumers and investors to keep in mind if deflation occurs:

1. Reduce your debt. One of the best ways to prepare for deflation is to focus on paying off debts.
2. Buy high-quality bonds.
3. Don’t load up on stocks.
4. Keep an eye on these sectors.
5. Don’t lose sleep over the risk.

What happens in a deflationary crash?

A deflationary spiral is a downward price reaction to an economic crisis leading to lower production, lower wages, decreased demand, and still lower prices. Deflation occurs when general price levels decline, as opposed to inflation which is when general price levels rise.

Where should I invest during deflation?

Deflation hedges include investment-grade bonds, defensive stocks (those of consumer goods companies), dividend-paying stocks, and cash. A diversified portfolio that includes both types of investments can provide a measure of protection, regardless of what happens in the economy.

Who is going to thrive in the coming deflation?

Corporate treasurers around the world will soon find themselves staring down deflation. Misunderstood by almost everyone, maligned by governments and central banks, and basically absent from the Western world for generations, deflation may be the most challenging environment in which businesses can operate.

What are the prospects for a deflationary collapse?

International Man: On the other hand, what are the prospects for a deflationary collapse, at least initially, as one or more of these historical bubbles in the financial markets inevitably burst? Doug Casey: This is an argument that students of Austrian economics have debated since at least the mid-1960s.

How are central banks trying to avoid deflation?

The deflation of such a stupendous amount of debt will overwhelm everything in its path. The U.S. Federal Reserve and other central banks are so desperate to avoid deflation that they are buying up toxic loans and junk bonds. In the long term, these debts must be repaid with tax revenues. And in a deflationary depression, tax revenues also plummet.

Why is deflation a contraction in money and credit?

Because deflation is a contraction in money and credit, it logically follows that deflation would occur only after a major societal buildup in the extension of credit and the simultaneous assumption of debt.

https://www.youtube.com/watch?v=223HOBBRSNI