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

[Fiatless]

So now we are seeing only the "tip of the iceberg", and within 2-3 years, if China does not come up with an extraordinary solution, we will actually see the decline of the "Chinese miracle".
Yes, despite the fact that "the second economy in the world", "the largest country", "the largest population" and "de-dollarization and the transition to the yuan" ...

Losing some parts of the US market was a major blow to the Chinese economy. The political dispensation of Donald Trump witnessed a rise in the relocation of major US companies from China back to the US or to other countries that share the same advantage like China. Many American firms moved to Chinese neighbors like Vietnam. This doubtlessly led to unemployment. But because of national pride and state control of media the problems of China are kept secret. But gradually the true situation of the Chinese economy is unfolding.

But China has started seeking extraordinary solutions. They have started expanding their partnerships in the Middle East, Africa, and other continents.

The PRC has comprehensive strategic partnerships with five MENAT states (Algeria, Egypt, Iran, Saudi Arabia, and UAE) and strategic partnerships with seven (Iraq, Jordan, Kuwait, Morocco, Oman, Qatar, and Turkey). https://foreignaffairs.house.gov/china-regional-snapshot-middle-east-and-north-africa/#:~:text=The%20PRC%20has%20comprehensive%20strategic,%2C%20Qatar%2C%20and%20Turkey).

In Africa, China is using loans, infrastructural investments, and other financial partnerships to hold mostly rich African nations captive. China is the biggest bilateral creditor to Kenya, Angola, Republic of the Congo and the largest lender to Côte d’Ivoire. Although their investment and lending power have reduced this year at least they account for 12% of Africa's external debt.  

Although these investments or partnerships will not be compared with the US trade services trade deficit that China enjoyed before the anti-China trade policy by Trump but are they gradually diversifying the Chinese export market.

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[kryptqnick]

I've watched a video some time ago about China that explained that things will go badly for it economically due to childbirth policies. So at first China encouraged families to have many children, and that really helped after some time because of all that youth entering the workforce. But then the population was growing way too fast, so China started harsh policies to limit the number of children to 1. It sort of helped with the population growth, but again, China overdid it, and when the policy was abolished in 2016, it was already too late. I don't know if the current situation is already the result of unsteady population policies, but if not, it can become an issue later and have even more negative economic impact.

Still, I don't think the world is generally heading toward deflation.

[bettercrypto]

So, to make this long story short, two simple opinions:
- do you believe we're heading to deflation?
- how do you think the price of BTC will be influenced if we do so?

It's always the dream of the economies to move towards deflation, but the reality is quite different from a dream. In current situation I don't think that we are yet heading towards deflation and even I think that we might have to face another phase of huge inflation if things continue this way. The US economy might face huge challenges in coming months and as a result the inflation can vary in ranges. The situation isn't that bad in China and they still have good control over inflation in their country.

I think the price of Bitcoin will be impacted in a good way because most of the investors will transition from fiat to Bitcoin and that will mostly cause an increase in its value. The adoption rate will increase in coming months and of course the halving event isn't that far away now and with that the value of a Bitcoin could be anywhere from $80k to $120k, and the investors who put money into it right now will have good ROI. I'm hoping that within 2 years the growth of users who will somehow transition to Bitcoin will increase drastically and the change will be really positive for the crypto-currency and its community.

Is there any country in the world today that is experiencing deflation in this era that we are facing? Doesn't it seem like nothing? almost all countries are still facing inflation. Now, what the U.S. did that some thought would be paused has not happened yet. Maybe because the U.S. still doesn't think it's that high and maybe they still think everything is under control, that's what I see.

But the truth in my eyes is not. And if I compare it with China, the situation of both of them is quite far. Because the U.S. is deep in debt and the inflation in China can be said to be under control in my opinion and observation. There's only one thing I'm sure of if the inflation average continues to rise, even Bitcoin's value will surely be dragged down.

[wajik-tempe]

Regarding the possible influence on Bitcoin's price, it is true that due to its restricted quantity, Bitcoin has sometimes been seen as a hedge against inflation. However, it is critical to note that the price of Bitcoin is affected by variables other than macroeconomic conditions, such as market sentiment and regulatory changes. While the prospect of a deflationary phase may cause alarm, it is critical to have a balanced view and assess the larger economic environment. Diversification is key for making educated investing decisions, as is comprehending the inherent risks and volatility of cryptocurrencies. Anyway, thanks for giving this useful knowledge.

[redwine49]

So, to make this long story short, two simple opinions:
- do you believe we're heading to deflation?
- how do you think the price of BTC will be influenced if we do so?

1. no, if we are heading to deflation. prices of goods & services must be going down.
    if we do that the bank must reduce the money supply and they should raise bank interest rates.
2. BTC will go down if stablecoin fall just like luna

[Fiatless]

I've watched a video some time ago about China that explained that things will go badly for it economically due to childbirth policies. So at first China encouraged families to have many children, and that really helped after some time because of all that youth entering the workforce. But then the population was growing way too fast, so China started harsh policies to limit the number of children to 1. It sort of helped with the population growth, but again, China overdid it, and when the policy was abolished in 2016, it was already too late. I don't know if the current situation is already the result of unsteady population policies, but if not, it can become an issue later and have an even more negative economic impact.

Still, I don't think the world is generally heading toward deflation.

This problem will not only affect China but most countries in Europe, Asia, and America that are suffering from low birth rates. Most of the labor force is aging and the youth are not so much interested in raising families because these birth control policies have changed the mentality of most baby boomers to have just one or two or no children. The current economic problems are not also helping matters because most people might not afford to finance a family. The effect will be that industries will have to rely on immigrant or foreign workers to function.

Sensing the danger ahead most countries such as Russia, China, Italy, France, Sweden, Japan, South Korea, etc are paying families to have more children. South Korean government is even willing to bear the cost for everything about pregnancy, including babysitting service cost and even the cost of dating to get pregnant. Meanwhile developing countries in Africa, Asia, and America are promoting birth control measures because of overpopulation.

[DrBeer]

So now we are seeing only the "tip of the iceberg", and within 2-3 years, if China does not come up with an extraordinary solution, we will actually see the decline of the "Chinese miracle".
Yes, despite the fact that "the second economy in the world", "the largest country", "the largest population" and "de-dollarization and the transition to the yuan" ...

Losing some parts of the US market was a major blow to the Chinese economy. The political dispensation of Donald Trump witnessed a rise in the relocation of major US companies from China back to the US or to other countries that share the same advantage like China. Many American firms moved to Chinese neighbors like Vietnam. This doubtlessly led to unemployment. But because of national pride and state control of media the problems of China are kept secret. But gradually the true situation of the Chinese economy is unfolding.

But China has started seeking extraordinary solutions. They have started expanding their partnerships in the Middle East, Africa, and other continents.

The PRC has comprehensive strategic partnerships with five MENAT states (Algeria, Egypt, Iran, Saudi Arabia, and UAE) and strategic partnerships with seven (Iraq, Jordan, Kuwait, Morocco, Oman, Qatar, and Turkey). https://foreignaffairs.house.gov/china-regional-snapshot-middle-east-and-north-africa/#:~:text=The%20PRC%20has%20comprehensive%20strategic, %2C%20Qatar%2C%20and%20Turkey).

In Africa, China is using loans, infrastructure investments, and other financial partnerships to hold mostly rich African nations captive. China is the biggest bilateral creditor to Kenya, Angola, Republic of the Congo and the largest lender to Côte d’Ivoire. Although their investment and lending power have reduced this year at least they account for 12% of Africa's external debt.

Although these investments or partnerships will not be compared with the US trade services trade deficit that China enjoyed before the anti-China trade policy by Trump but they gradually diversifying the Chinese export market.

Namely, American companies are leaving the Chinese market and moving production to neighboring countries, including Vietnam, India and others. And this is a real problem for the Chinese economy.

With regard to Chinese expansion into Africa and neighboring regions, this is a real enslavement of countries. A "beautiful" example is Sri Lanka. Read how the country slipped into the state in which they are now. "Chinese investment", it will soon become a household name! Their goal is not the development of some segment of the economy, but the draining of all resources, and the transformation of the country into their financial, debt slave. Despite China's very long history, China has never been able to become a "civilized" investor. They choose a very harsh policy in relation to the country where they invest... I can write a lot on this topic, but anyone can find many examples of what such investments lead to.

[stompix]

1. no, if we are heading to deflation. prices of goods & services must be going down.
    if we do that the bank must reduce the money supply and they should raise bank interest rates.

The complete misconception is that an increased money supply will always trigger inflation!
Japan is the perfect example of why this doesn't happen if you don't have consumers spending that money.

Let me give you a clear example
- the government throws $1000 at everyone, every single citizen rushes to buy stuff, consumption doubles, there aren't enough products on the market so obviously prices go up as we have seen after covid, we have inflation
- the government sends $1000 but every single citizen deposits this in the bank. There is no increased consumption, there is no imbalance in the market, there is no extra demand, so there is no inflation!

Is there any country in the world today that is experiencing deflation in this era that we are facing?

Before the spike in energy prices that was Japan, they are actually welcoming this inflation right now cause they have tried to trigger one unsuccessfully for a decade, for example, the BOJ is still keeping interest rates at 0% even now.

But the truth in my eyes is not. And if I compare it with China, the situation of both of them is quite far. Because the U.S. is deep in debt and the inflation in China can be said to be under control in my opinion and observation.

China is deeper in debt than the US. And China can't print $.
https://www.bloomberg.com/news/articles/2023-05-08/china-s-debt-to-gdp-ratio-rises-to-record-279-7-on-credit-boom

[Z390]

I've watched a video some time ago about China that explained that things will go badly for it economically due to childbirth policies. So at first China encouraged families to have many children, and that really helped after some time because of all that youth entering the workforce. But then the population was growing way too fast, so China started harsh policies to limit the number of children to 1. It sort of helped with the population growth, but again, China overdid it, and when the policy was abolished in 2016, it was already too late. I don't know if the current situation is already the result of unsteady population policies, but if not, it can become an issue later and have an even more negative economic impact.

Still, I don't think the world is generally heading toward deflation.

This problem will not only affect China but most countries in Europe, Asia, and America that are suffering from low birth rates. Most of the labor force is aging and the youth are not so much interested in raising families because these birth control policies have changed the mentality of most baby boomers to have just one or two or no children. The current economic problems are not also helping matters because most people might not afford to finance a family. The effect will be that industries will have to rely on immigrant or foreign workers to function.

Sensing the danger ahead most countries such as Russia, China, Italy, France, Sweden, Japan, South Korea, etc are paying families to have more children. South Korean government is even willing to bear the cost for everything about pregnancy, including babysitting service cost and even the cost of dating to get pregnant. Meanwhile developing countries in Africa, Asia, and America are promoting birth control measures because of overpopulation.

This could be the scariest thing I've read on on this forum since I got on here, imagine giving birth to children just for the sake of the country to be able to replace old workers in many countries, this was why the government gets mad once they heard that people now have a way of making a living without working for any government, this is slavery in disguise to be honest.

This could also be the reason why we are never taught in school about how to make money, if everyone knows how to make money who is going to run the government businesses and companies? It's a crazy world for real...

It's like telling the world to create more babies 👶 for working purposes, damn.

[yhiaali3]

I think that deflation has already begun in many countries and other countries are rapidly heading towards the same thing. This is a natural result of declining resources, high inflation, the huge increase in fuel prices, and the worst is yet to come.

Here in my country, for example, because of inflation and the loss of the value of the local currency, deflation occurred, so the demand for many commodities decreased, and many professions stopped as a result of the decrease in demand. There is only a demand for basic and food items.

As for the price of bitcoin, I think that the effect will be positive because many people tend to buy bitcoin because they believe that bitcoin is a store of value. They also believe that it is a profitable investment in the long term, so it is expected that the continuation of inflation and deflation will lead to continued demand for bitcoin and the continuation of its price increase in the long term. .

[redwine49]

I think that deflation has already begun in many countries and other countries are rapidly heading towards the same thing. This is a natural result of declining resources, high inflation, the huge increase in fuel prices, and the worst is yet to come.

Here in my country, for example, because of inflation and the loss of the value of the local currency, deflation occurred, so the demand for many commodities decreased, and many professions stopped as a result of the decrease in demand. There is only a demand for basic and food items.

As for the price of bitcoin, I think that the effect will be positive because many people tend to buy bitcoin because they believe that bitcoin is a store of value. They also believe that it is a profitable investment in the long term, so it is expected that the continuation of inflation and deflation will lead to continued demand for bitcoin and the continuation of its price increase in the long term. .

i still don't know what do you mean.

Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.
deflation is the overall decrease in the cost of an economy's goods and services. While a slight decrease in prices may spur consumer spending, broad deflation can discourage spending and lead to even greater deflation and economic downturns

based on the definition above, inflation and deflation are not linear. there is only one way just like the bear and the bull

1. no, if we are heading to deflation. prices of goods & services must be going down.
    if we do that the bank must reduce the money supply and they should raise bank interest rates.

The complete misconception is that an increased money supply will always trigger inflation!
Japan is the perfect example of why this doesn't happen if you don't have consumers spending that money.

Let me give you a clear example
- the government throws $1000 at everyone, every single citizen rushes to buy stuff, consumption doubles, there aren't enough products on the market so obviously prices go up as we have seen after covid, we have inflation
- the government sends $1000 but every single citizen deposits this in the bank. There is no increased consumption, there is no imbalance in the market, there is no extra demand, so there is no inflation!

so you know how economy work right? i want to ask something. what is interest rates? and what is the relationship between deflation and inflation?

[yhiaali3]

so you know how economy work right? i want to ask something. what is interest rates? and what is the relationship between deflation and inflation?

Interest rates can be said to be a major influence in the occurrence of inflation or deflation. When interest rates are low, inflation occurs, because individuals and companies borrow money from banks at a low interest rate and then pump it into the markets in the form of purchases or investments, and because the return on deposits is weak, they do not prefer keep their money in the bank.

While deflation raises interest rates on loans, which makes investors and companies not prefer to take loans from banks for their investments because they are high, while individuals prefer to put their money in deposits because it gives a greater return, and this causes weak spending in the markets, which makes commercial activities not find buyers. for its goods.

From here we know that deflation is the opposite of inflation, i.e. it is a decline in the prices of goods and services as a result of weak demand for them, as the value of money rises in exchange for the decrease in the value of goods, and this leads to economic recession and an increase in the unemployment rate.

The causes of deflation are usually the result of an excess availability of goods or weakness in purchases, or due to a rise in the interest on borrowing.

I do not know if I made a mistake, but I spoke in last post about a case that exists in my country. So please correct me if there is any mistake.

[slapper]

so you know how economy work right? i want to ask something. what is interest rates? and what is the relationship between deflation and inflation?

Interest rates can be said to be a major influence in the occurrence of inflation or deflation. When interest rates are low, inflation occurs, because individuals and companies borrow money from banks at a low interest rate and then pump it into the markets in the form of purchases or investments, and because the return on deposits is weak, they do not prefer keep their money in the bank.

While deflation raises interest rates on loans, which makes investors and companies not prefer to take loans from banks for their investments because they are high, while individuals prefer to put their money in deposits because it gives a greater return, and this causes weak spending in the markets, which makes commercial activities not find buyers. for its goods.

From here we know that deflation is the opposite of inflation, i.e. it is a decline in the prices of goods and services as a result of weak demand for them, as the value of money rises in exchange for the decrease in the value of goods, and this leads to economic recession and an increase in the unemployment rate.

The causes of deflation are usually the result of an excess availability of goods or weakness in purchases, or due to a rise in the interest on borrowing.

I do not know if I made a mistake, but I spoke in last post about a case that exists in my country. So please correct me if there is any mistake.

Appreciating your insight, I'd like to build upon your understanding and correct some misconceptions. Your definition of interest rates is quite on point. They act as a lever to control inflation and deflation. But, the relationship between interest rates and inflation or deflation is not always as direct as you've presented.

For instance, low interest rates typically stimulate borrowing and investment, which could lead to inflation. But in periods of economic downturn, this might not always work (a situation economists call a 'liquidity trap').

Conversely, deflation isn't a result of high-interest rates. It's typically a symptom of decreased demand in the economy. High-interest rates could encourage saving, thus reducing spending, but the correlation between high-interest rates leading directly to deflation is not well-founded in economic theory.

The interplay of these factors is complex, often influenced by a multitude of other factors. Monetary policy, fiscal policy, global economic conditions, and even psychology all play a role in this delicate balance.

[Wind_FURY]

Had to chop the title so it really sucks but I can't do better right now!  

With everyone focused on the debt of the US, the freezing Europeans, yeah lol, there is some really bad news on the horizon and for all sides in this game. If a slowdown in the Western world could be explained by jumping energy prices last year, prices that have since gone down to 2013 levels when it comes to pipe gas, in China manufacturing is dropping right after the reopening, at a continuous pace and despite the downturn in both raw materials and energy prices, copper, coal, iron, steel, wheat, everything is sliding with the PMI alongside.

So, to not be biased and using only the English version of the mouthpiece of the Chinese government:

China’s factory activity growth falters in March due to weaker demand, slowing production
China’s factory activity dipped in April on weak demand as bumpy post-Covid economic recovery continue
China’s official manufacturing purchasing managers’ index (PMI) fell to 48.8 in May from 49.2 in April

It's probably because China has been the most aggressive in locking down their country during the pandemic. Plus the above average growth their economy was only made possible through the above average growth of their national debt. It is not sustainable.

And things get worse, remember this is Chinese information, so take it with a grain of salt since it might be far worse:

Youth unemployment has become one of Beijing’s biggest economic headaches amid its recovery efforts, and in April, 20.4 per cent of China’s 16-24 age group were unemployed, up from 19.6 per cent in March.

So no manufacturing so now jobs for the not qualified, no jobs for the young ones that have finished college, which is a different area, and this can lead only to one direction.

But it IS far worse. China is going through a population implosion caused by decades and decades of their One Child Policy. In time, there won't be enough young people to tax to take care of their retirees.

If the economic slowdown is present everywhere, China and the Western World, manufacturing is affected on all continents there is only one culprit in sight, and that is demand destruction, and with this, there is a chance we might end in a deflation period if things don't change.

There is simply no demand, and with no demand, there are two choices, prices going down, which means obvious deflation, or bankruptcies which I doubt anyone is that stupid to do before trying the first solution, but the first choice is pretty hard to do when you just had an influx of free money and the rate rises have not yet started to be serious enough.

There is an interesting piece on this from Forbes:
https://www.forbes.com/sites/greatspeculations/2023/05/13/more-proof-deflation-is-the-future/
of course, it's just an opinion and I will from the start warn you it's a bit speculative even with the data presented but it ends with the same warning as many others on the incoming deflation, although their take on what to do and what next is really not my cup of tea.

Now, slowly turning from this to Bitcoin.

Bitcoin was mainly designed as a p2p way of exchanging and transmitting value, due to its limited supply it turned into a way of safekeeping your wealth and further down the line evolved into an investment!

Now, assuming all the required stars align and we really head into a deflationary period for fiat currencies, how will the price of Bitcoin react, since this is the only thing that can be affected by the economy, the rest, the p2p payments, the cold storage, the be your own bank will for sure not be affected, but lately those are of less interest and the focus is on the price most of the time.

For sure, Bitcoin has the required advantage to erase all fears, that is adoption, unlike other commodities it can still attract users, and since I don't really believe those hundreds of millions of users quoted by most sources right now I can safely bet in my mind an x10 adoption rate would be doable at any time from the current moment. But, the question is, will it happen in this short span with enough traction?

During times of deflation, fiat currencies like the Dollar become more scarce, it encourages people to save more/spend less, then therefore its value goes up.

- Because Bitcoin's value is obtained against the Dollar, then Bitcoin's value goes down. I believe a golden opportunity for HODLers.

So, to make this long story short, two simple opinions:
- do you believe we're heading to deflation?
- how do you think the price of BTC will be influenced if we do so?

Probably just a "period of deflation" before BRRR-Money Printing by the Cabal, https://bitcointalk.org/index.php?topic=5433243.0

There's also BRICS. If China implodes, BRICS nations will be playing a game of hot potato, ready to drop each other's fiat currencies.

[stompix]

so you know how economy work right? i want to ask something. what is interest rates? and what is the relationship between deflation and inflation?

You can google those definitions yourself, I don't feel like copy-pasting basic definitions from wikis after you bragged about knowing them that well.

You said that money printing needs to stop before we see deflation, I told you that's not mandatory.
Here is a paper on deflation in Japan:
https://www.bis.org/publ/work188.pdf

Deflation was possible despite rates being 0 and despite the M1 growing 15 times since 1985.
/end of the debate

While deflation raises interest rates on loans, which makes investors and companies not prefer to take loans from banks for their investments because they are high, while individuals prefer to put their money in deposits because it gives a greater return, and this causes weak spending in the markets, which makes commercial activities not find buyers. for its goods.

It's the opposite, you have described inflation, deflation brings down the value of goods which makes loans unattractive since you're borrowing now money to buy stuff that will be less expensive in a few months, so rates will go to zero or vene below in case of deflation.

There's also BRICS. If China implodes, BRICS nations will be playing a game of hot potato, ready to drop each other's fiat currencies.

It's already happening even now:
https://www.wionews.com/world/russia-does-not-know-what-to-do-with-147bn-in-rupees-it-has-amassed-599540

it's nice trying on dealing in shitcoins you can print endlessly, too bad that nobody wants your shitcoins! 

As for China's demographic bomb, it's in the making but it will take time, it needs a full generation to actually show effects, and it will begin when the ones that are right now in their 30+ will reach retirement, according to their own 2010 census, they had 127mil in the 20-24 (now these are 33-37) area only 74, 70, 75 millions in the 0-4,5-9,10-14 groups.
That's a 40 million workers gap nobody will be able to manage!

[Wind_FURY]

There's also BRICS. If China implodes, BRICS nations will be playing a game of hot potato, ready to drop each other's fiat currencies.

It's already happening even now:
https://www.wionews.com/world/russia-does-not-know-what-to-do-with-147bn-in-rupees-it-has-amassed-599540

it's nice trying on dealing in shitcoins you can print endlessly, too bad that nobody wants your shitcoins! 

In the fiat world, what makes a World Reserve Currency is the demand for that currency, and nothing compares to the U.S. Dollar in Saveability, Liquidity and Investsbility. It's like a license to print!

As for China's demographic bomb, it's in the making but it will take time, it needs a full generation to actually show effects, and it will begin when the ones that are right now in their 30+ will reach retirement, according to their own 2010 census, they had 127mil in the 20-24 (now these are 33-37) area only 74, 70, 75 millions in the 0-4,5-9,10-14 groups.

That's a 40 million workers gap nobody will be able to manage!

Plus the problem can't just be solved easily by changing the One Child Policy to their current Three Child Policy because China has a gender demographic problem as well. There's an imbalance in ther male-to-female ratio towards more males in the population. That means less child-bearing people available besides the low birth rate of their females.

[Flexystar]

China is private land on the earth which does not exist and it was put their by aliens. Lolz.
They have sadly made lot of amendments while giving decisions regarding the use of Bitcoin. First china was doing full fledge mining and most of the ASICS were manufactured there only. They were on right path of Bitcoin Future / crypto as whole. They were having lot of employments in the mean time but they drifted, banned everything related to Bitcoin and rolled back the business into losses.

China should not be considered as serious continent when it comes to doing the business. They say Chinese items/promises can either last until the next block or may be until the moon, but you wouldn't be sure of it until you try.

In similar ways, the deflationary future isn't a solid promise. Nothing relies on one continent if we are talking about decentralized asset that is available throughout the world. With China anyway not in support of Bitcoin, there seems null effect on the Bitcoin and its future.

[southerngentuk]

During a deflationary period, when the general price level falls, the demand for goods and services can decrease, leading to a decrease in economic activity and the possibility of job losses. Basic and essential goods often continue to be in demand, while non-essential goods and services may experience a decline in demand. So when people learn about bitcoin, they see it as a store of value and a potential long-term investment. Bitcoin's limited supply and decentralized nature have led some to see it as a hedge against inflation and currency devaluation. In times of economic uncertainty, people may seek alternative assets, including cryptocurrencies like Bitcoin, as a means of preserving their wealth. This can be a positive move for investors in the market.

[redwine49]

so you know how economy work right? i want to ask something. what is interest rates? and what is the relationship between deflation and inflation?

Interest rates can be said to be a major influence in the occurrence of inflation or deflation. When interest rates are low, inflation occurs, because individuals and companies borrow money from banks at a low interest rate and then pump it into the markets in the form of purchases or investments, and because the return on deposits is weak, they do not prefer keep their money in the bank.

While deflation raises interest rates on loans, which makes investors and companies not prefer to take loans from banks for their investments because they are high, while individuals prefer to put their money in deposits because it gives a greater return, and this causes weak spending in the markets, which makes commercial activities not find buyers. for its goods.

From here we know that deflation is the opposite of inflation, i.e. it is a decline in the prices of goods and services as a result of weak demand for them, as the value of money rises in exchange for the decrease in the value of goods, and this leads to economic recession and an increase in the unemployment rate.

The causes of deflation are usually the result of an excess availability of goods or weakness in purchases, or due to a rise in the interest on borrowing.

I do not know if I made a mistake, but I spoke in last post about a case that exists in my country. So please correct me if there is any mistake.

Yes that's right. actually our little world in crypto is just like our real world and we have cycles. the problem is that goods and services are cheaper when produced on a large scale. if the scale of sales and services decreases, then the price of goods and services feels more expensive. so companies want to cut spending because sales of goods and services decrease so the bank know what come next and they don't want to go bankrupt first

[d5000]

The Chinese car industry is a good example, but... I am absolutely sure that this will all end with the introduction of additional duties on Chinese cars, which will cross out the benefits of buying them. The EU will protect its market, as the EU car industry is one of the most important elements of the economy.
The second side of the Chinese car industry is Western technology, without which there are no production lines or high-quality implementation of car functionality.

As far as I know the quality of Chinese cars has improved greatly in the last years, so what your friend told you "a couple of years ago" may already be outdated. It's only the last 2-3 years I've seen good reviews even in European media. And of course this is mainly in the electric/H2 car field.

About increasing tariffs - I don't really believe in that; EU companies are dependant on selling their products to China, so they won't risk a "customs war" like the US is currently willing to risk.

I also don't believe in the theory of the demographic bomb mentioned by others here. There are lots of countries who managed a transition from a society with a low median age to a high median age without major problems. It can be an element lowering economic growth for some years but I believe it won't be dramatic. China (and Asian countries in general, also Japan, Korea etc.) are also known for being quite aggressive using productivity-boosting technologies, for example high tech construction methods with few human workers, or also technology used in care of the elderly, and AI will even improve this situation.