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May 10th, 2000, 02:23 AM
#12
Frenzied Member
That's not impossible, it's called deflation, It's very dangerous because when prices start to drop people stop buying things because they think "Why should I buy today when It'll be cheaper tomorow, prices then drop even further as shops try to encouragge people to buy things, which in turn makes people wait longer, then companies go out of business, jobs are lost, which means people have less money and things have to get even cheaper, resulting in more job losses.
Eventually the government has to step in and Fix prices, ie make it illegal to drop prices for a limited time. It happened in Germany in the late eighties(I think) but not disasterously.
People don't realise but a small amount of inflation is good because it keeps money moving, or in banks where it gets invested, money hiding under a matress is a very bad thing.
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