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Soleron said:

Kasz216 said:

Actually, I thought the Fed was using QE as Stimulus money more or less to decrease unemployment.

Not to stop deflation.

Not that I think it's a good idea.

But I'm pretty sure that's why it was happening not deflation.

The problem with the Fed is that it's focus is always short term.

Inflation diminishes government debt. That's a good thing for the government.

Inflation is important because it creates a cost to hoarding money. If prices are deflating, it means your money gets more valuable if you just hold onto it and do nothing. It creates a disincentive to lend money, invest it, consume goods with it... pretty much everything we associate with economic activity.

Of course, the video goes on to point out all the prices that aren't deflating. As I understand it, the big price that is at risk of deflation is real estate, which is kind of a no-shit-sherlock consequence of a bursting real estate bubble.