Topic: China enters deflation as recovery flops and demand falling - page 2. (Read 268 times)

A mass layoff has been done by Chinese companies that have branch office in my country since May this year, most the workers are software developer and customer service who are working remotely, since the salary in here is relatively lower than in China. I guess if a country as big as China are having deflation it will affect other country too.

people dont wait. they notice they can get more for their money and stock up


deflation of bitcoin has caused bitcoins price to increase over the last 14 years. so dont worry about bitcoin prices tumbling

what happens in reality is as long as wages do not decrease(has not happened yet) people get to buy more goods and have more spare cash to buy other things for the same income. thus they buy more items, including investing more

china last month did not decrease its minimum wage and wont change things +/- again until next years budget..
which shows people are getting more income and more products for that income.. a double win. meanwhile businesses had their last year greedflation of 14% extra profit and now doing an out-of-season clearance sale of -5% which is normal business range for seasonal goods provision whilst remaining in profit.

Deflation isn't good for the economy, but mild inflation can be better than high inflation, for example, and intuitions about the negative impact of deflation and the positive impact of inflation are often questionable. For example, it's assumed that if the price gets a bit lower over time, people will wait and won't buy stuff, but one could easily counterpoint that if people want or need something today, they'll still buy it today, simply because they don't want to wait.
Moreover, Yuan dipped a bit into the deflation area at the end of 2020 and the beginning of 2021, so it's possible that something similar will happen this time around as well.
Dr.Bitcoin_Strange noted that if deflation spreads, people will start selling BTC because its price will drop. I'm not so sure about that because Bitcoin can easily increase in value well above the deflation rate and grow despite what's going on with top fiat currencies.

Well, deflation is not the only selling point for Bitcoin. There are others, like the  ability to use it globally, decentralization, self custody, censorship resistant, privacy-preserving, permissionless, etc
The other selling points will become more relevant when the need arises, for example when people need to send/recieve money globally as global fiat currencies like usd becomes difficult or impossible to use. The overall selling point is that Bitcoin is freedom currency/system and will always be very attractive to freedom loving people. And the selling points which are its ideals are strong fundamentals that will always give it  stronger value and higher demand over fiat currencies especially when people understand their benefits... Just as organic food are more valuable/expensive than junk when people know their values.
So, the whole truth about Bitcoin needs to spread globally and you wouldn't need to worry about price deflation in certain countries.

Even if we get deflation in most G7 countries, prices will never go back to 2019 levels. Way too much money was printed.

We might get a few negative prints but overall the costs compared to 2019 will be in the double digits anyways. Most people don’t realize that even with a recession we aren’t going to get back to affordable goods.

goods deflation is good. its when they start lowering minimum wage or reducing salaries that you then see TRUE deflation that harms people

the silly thing is we see what western news is calling chinas deflation all the time.. most retailers call out "end of season sales", 'clearance sales'

whats not highlighted is the start of 2021 was "greedflation" where producers raised their wholesale costs by 14% and so they made profit and also excess stock......
.. which they are now selling the excess stock at 5% below 2021 prices this is standard practice

overall 2 year average is still profitable

it would only be true deflation/news worthy economically when it starts affecting peoples wages

Well, I would say that let's see how long it can last and how well it spreads to other countries. I know that sometimes the unexpected happens, but with the economic systems of some countries being so down, I really don't see deflation taking place any time soon. But if it spreads so fast that it hits the US and Europe, then, as it is, many people are going to sell their Bitcoin because the price will definitely drop. Investors are going to be selling off, and if the pressure is too much, the price will drop. But again, @stompix, I am still wondering: if this happens, how long will it last? Perhaps not for ever, so Bitcoin will not die out; it will only suffer its recovery until the period is over, no matter how long it's going to last.
   
Again, the inflation rate in my country as of 2018 was 10%, but according to the CPI (Consumer price Index), the inflation rate now is 22.79%, which is an 12.79% increase from 2018, and I know it's even going to keep increasing over time. So, I will just sit and wait to see what happens. Bitcoin will soar through, even if the deflation spreads across other countries like the US, Europe, and other countries with large economies.

Told ya so moment 

China opening was a flop, if we're heading to deflation, what about Bitcoin?

Everyone who follows the news knows what happened today,  China has entered deflation!



Further reading, if anyone cares
https://www.nytimes.com/2023/08/09/business/china-economy-inflation.html
https://www.reuters.com/world/china/chinas-consumer-prices-swing-into-decline-deflation-risks-build-2023-08-09/

Now, you can't even cram in a whole topic the implication of deflation, why it's not good either, the speculation on how this will affect everything, and most crucially since we're on Bitcointalk, what's in for Bitcoin so less in just a post.
So making this as short as possible
- China is the first G20 to slip into deflation since Japan
- Despite pumping trillions into the economy since February the consumption is not picking pace but going down
https://www.scmp.com/business/article/3210562/china-pumps-us121-billion-economy-biggest-one-day-cash-injection-spur-post-covid-growth
each month
https://www.wsj.com/articles/china-cuts-rates-to-prop-up-flagging-recovery-6fe3ec72
- Exports and imports are going down as manufacturing is also contracting

- there is no demand for goods, the law of economics take over, price go down, people see prices going down they stop buying since they think it will be cheaper accelerating the spiral

The important thing, since inflation makes your wallet bleed some think that deflation is good, It might be temporary for your own household but long term it causes damages beyond those caused by inflation. Assume you're a business owner and you sell stuff, if people stop buying, is it good for you? Assume you're a factory manager, with no orders coming, is that good for you and the people employed? With no demand for your services, is it really good when the price of bread falls but you're not making any money cause you have no customers?
Normally I won't have to link to Wikipedia articles but for those who didn't read it, here are two key examples of what deflation can do:
- the Great Depression in the US in the 30's
- Japan lost decades in the 90's

Now fast forward, if the contagion grows and it spreads to countries that are currently at 3-5% inflation and going down, like in the US and Europe, what will be in this for Bitcoin?

Bitcoin was supposed to be a p2p electronic cash system that would allow you to transfer and keep your money without the need for a third party with the finite supply ensuring it wouldn't be affected by issues plaguing the fiat money printing system.
With the price gradually taking over and more and more being interested in the returns you can get for just holding coins, and a shield against rampaging inflation, would this change in a prolonged period of deflation? With prices everywhere falling down would the majority still be interested in buying and holding an asset that temporarily would be stripped of one of its current selling points?

I know this is a bit more of speculation but since it heavily relies on events in the world economy I think it's a discussion that goes hand in hand with economics not just speculation.