The Full Wiki

More info on Biflation

Biflation: Wikis

Advertisements
  

Note: Many of our articles have direct quotes from sources you can cite, within the Wikipedia article! This article doesn't yet, but we're working on it! See more info or our list of citable articles.

Encyclopedia

From Wikipedia, the free encyclopedia

Biflation is a state of the economy where the processes of inflation and deflation occur simultaneously.[1] The term was first introduced by Dr. F. Osborne Brown, a Senior Financial Analyst for the Phoenix Investment Group.[2] During Biflation, there's a rise in the price of commodity/earnings-based assets (inflation) and a simultaneous fall in the price of debt-based assets (deflation).

The price of all assets are based on the demand for them versus the volume of money in circulation to buy them.

With Biflation on the one hand, the economy is fueled by an over-abundance of money injected into the economy by central banks. Since most essential commodity-based assets (food, energy, clothing, precious metals) remain in high demand, the price for them rises due to the increased volume of money chasing them. The increasing costs to purchase these essential assets is the price-inflationary arm of Biflation.[3]

With Biflation on the other hand, the economy is tempered by increasing unemployment and decreasing purchasing power. As a result, a greater amount of money is directed toward buying essential items and directed away from buying non-essential items. Debt-based assets (mega-houses, high-end automobiles, stocks and bonds) become less essential and increasingly fall into lower demand. As a result, the prices for them fall due to the decreased volume of money chasing them. The decreasing costs to purchase these non-essential assets is the price-deflationary arm of Biflation.

Footnotes

  1. ^ Urban Survival Inside Report #62, December 29, 2002
  2. ^ Dallas Economic Summit, 2003. "Inflation or Deflation. Why Choose?"
  3. ^ Journal of Macroeconomics, Vol 28, I, March 2006, Pages 267-271, US inflation and commodity prices: Analytical and empirical issues

External links

Advertisements

Advertisements






Got something to say? Make a comment.
Your name
Your email address
Message