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What is deflation?

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What is deflation — and why it matters. Deflation is a sustained decrease in prices. It sounds good — things get cheaper — but it's dangerous. Consumers delay spending, businesses stop investing, and the economy stalls. That's the deflationary spiral. When deflation hits, cash becomes king. But central banks hate it — it's harder to fix than inflation. This is what we teach in Module 6.1 — Macro Indicators and Sentiment. https://youtu.be/V1Rk4eShsrk

Key Takeaways

  • Deflation is a sustained decrease in prices
  • It sounds good but it's dangerous — consumers delay spending, businesses stop investing
  • That's the deflationary spiral
  • When deflation hits, cash becomes king
  • Central banks hate deflation — it's harder to fix than inflation
  • This is what we teach in Module 6.1 — Macro Indicators and Sentiment

Get the full breakdown and the complete Larke Cycle framework.

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For educational purposes only. Not financial advice. Past performance does not guarantee future results. Trading involves risk. Consult a qualified financial adviser before making investment decisions.

I'm Russell Larke — BA (Hons) Business Management, currently completing an MSc in Systems Thinking in Practice, with plans to pursue a doctorate. I've run an environmental consultancy as Managing Director and have traded financial markets for years. I teach the Larke Cycle — a testable framework for understanding market structure beyond chartism. Regards, Russell Larke BA (Hons) Business Management | MSc Candidate (Systems Thinking) Beyond the Chart

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