Holistic Survival
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Deflation and Economic Survival

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economic survivalWhile our analysts believe beyond a shadow of doubt that the long term outlook for the world economy is inflationary, it behooves the modern survivalist to understand the idea of deflation and especially the risks related to economic survival. Most of us understand that inflation leads to ever-increasing prices of goods and a lessening of purchasing power. Therefore, it stands to reason that deflation means essentially the opposite. True statement!

But what is the effect of deflation and why do pasty men at desks under fluorescent light bulbs make themselves sick in the stomach at the prospect of prices falling? Well, it goes something like this. A deflationary cycle means people aren’t so quick to whip out the credit card or plunk down hard-earned dollaristas on the retail counter. The result is prices fall in the face of softening demand. Production grinds to a halt because nothing is flying off the shelves. Consumers see prices falling and decide to wait on additional purchases in the belief they will fall further.

Investors and buyers hoard currency rather than invest it because they don’t trust even the most solid of securities to maintain their value, much less to increase. Historically not all periods of deflation lead to poor economic growth but one sticks in our collective consciousness – The Great Depression. Ergo, everyone hears the word “deflation” and hunkers to the floor solely concerned with their own economic survival.

Your real enemy is the spectre of inflation lurking just around the corner. That’s the beast that may destroy your portfolio unless you do something drastic. Our suggestion: get out of stocks as much as is feasible and into income property investments, which is the only asset that profits from inflation. Your future economic survival may truly depend on action taken now.

The Holistic Survival Team

Holistic Survival

Flickr / x-ray delta one

 

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