Deflation versus Hyper Inflation

18 February 2009

The economic circumstances are forcing many businesses to look at whether we face a world of declining growth or rampant uncontrollable growth.

Deflation tends to be viewed by economists as a nightmare, in affect if you are long debt and loans these grow in size as the value of the economy deflates, those with savings will benefit most. The alternative to deflation is hyper-inflation where the value of the economy grows too fast. In affect cash savings are wiped out as valueless (see Zimbabwe where they are now printing trillion dollar notes to keep up with hyperinflation). For those long debt the hyperinflation wipes out its value. So businesses must assess if they want deflation or hyperinflation and position themselves accordingly.


UK Government  Risk Management  Industry 

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