經濟,財務,統計學,數理科學與政治評論

My Dear American people:

  There seems to be a dilemma between deflation and the living standard these days. If we want to let those once poor nations join into the chain of world trades. It is inevitable to see more advanced nations have to face the problem of deflation. But it does not mean lower standard livings of advanced nations. It just mean we can buy cheaper products from those nations. The quality can reveal its price. Even those people living in developing nations know the philosophy well and love to pay higher price for it. If the deflation is a normal thing for us, how come poeple always blame the bad economy on the deflation? I think the reason behind is due to misperception. The USA does face deflation in many goods but people do not see the truely deflation happens there. The reason behind is people always can find some products to let them pay higher prices. In the 1990s, those products are IT products. In the 2000s, those products are food products. It just shows the deflation is a vague concept because we do not see the price level is decreasing all the time. The reason behind is the labor cost or human capital always find its way to show on some goods or services and people do pay more on those things. It means people do find the way to increase their salaries in the respective business. The labor wage does find some increases in some industries or some products. In such case, the deflation in some products are good because people can pay a little more on those products with increasing prices. And the general price level will not fall.

  If you ask me how come Japan face deflation all the time these days, I guess the answer is obvious due to the aging society with lower expectation on their lives. Because people do not need a lot of fancy things anymore. People even do not need some fancy APPs on their smartphones. How can you expect there will be a trend of inflation as those people are elder and reluctant to face a new world? Those products they need can all be produced offshore and what they need most is what they can not afford, that is the medicare. People can not afford those high quality medicare with higher prices, so they can not pay much for it. Even the goods or services with increasing costs like medicare can not get its decent price to be paid by the elder Japanese, how can you expect the society can live in an inflation world? So do not expect Japan can raise its inflation rate to 2 percent unless they face a nortorious hyperinflation. It just won't happen.

  It also may not happen in the States because right now we still see those elder people in the States use Apps on their smartphones and we do see people love to pay big bucks on a lot of fancy things. It will bring the inflation to those goods and services, so is the society. That is the reason why the USA is different from Japan. And it is the reason why we will not expect the deflation happens in the States lately. It also mean the living standard in real purchasing power is not falling if you keep your innovation alive and let people (elder or young) love to use and pay for it. Those deflation and nonsence lower living standards will not happen or to be seen in the States as some people worry about.