Originally Posted by wig

By continuing to inject liquidity in the system or in the case of a serious rebound in the economy failing to mop up the liquidity.

I agree with you that deflation is much more of a risk than hyperinflation. I think hyperinflation has more potential after a deflationary collapse if that were to happen.

I've never heard the term hyper-deflation. I think by the very mechanics of deflation they are "hyper" if they cannot be stopped.

Take Minte as a businessman for example. Imagine what he would do if he saw collapsing prices for the commodities or other resources he manages as part of his business. I imagine he would be hard pressed to buy the commodities he needs, invest in infrastructure, labor, etc. if, tomorrow or next week or whatever his horizon was, he expected the cost of all these things to be cheaper.

Add to that the fear that by the time he produced the items he sells they would be down in price and he would be trying to sell to others who also may be anticipating still lower prices so they too refrain from making purchases.

Once people understand how deflation would play out in today's world, they would understand why it is the worse possible outcome.

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