Germany, Deflation, and Worries

 People don't usually hear the term deflation....it's inflation they hear constantly.

Deflation is where you manufacture something at x-cost, and you can't sell it at that price, so you cut your profits to zero, and offer the service or manufactured item at X-minus 5-to-10 percent.  It's sold at a rate to cover manpower, raw material and logisitics.....so the sales tax lags, the company tax payment is crappy, and stock-holders are holding zero dividend stock.  In fact, the stock probably will decrease by 10 to 30 percent because of the dismal economic trend.

Deflation occurred in the 2008/2009 period....where houses were dumped at a high rate.  

Some people would say this is a great period for individuals with cash in their hand....they can get a product or item at great value, for less money.  If you don't have money at this point, then there's not much reason to celebrate.  If you are holding the product with zero profit, you aren't that happy.  

With Germans preoccupied presently with spiraling upward natural gas prices....where your monthly payment went from 85-to-100 Euro....upwards to 400-to-500 Euro, deflation is underway.

You will cover the extra 4,000 to 5,000 Euro in cost by raiding your vacation account for 2023, or the money you set aside for a new car in 2023, or pulling the savings for new living room furniture you had planned....covering the heating cost.

So in the spring of 2023, the Germans will be hearing deflation a great deal.  

You will find car companies literally begging for you to buy a car at pure cost.  You will find cruise trips valued at half-price.  Cellphone prices?  Dropping like a rock.  Breweries offering 30-percent off if you buy an entire pallet of beer.  

Here's the thing, unless this escalation of natural gas prices is halted....the period of worry goes beyond summer of 2023, and into the summer of 2024.  

Stocks would drop like a rock.  Retirees would worry over their savings.  Vacation resorts would fret over lack of guests.  Pubs would be begging for customers to return.  

Prepare for the daily mention of deflation, and political folks at some bitter situation where they can't resolve problems without creating bigger problems down the road.