Our current economic crisis is one of deflation.  When the global economy is shut down, things go to hell quickly.  This is why we are seeing so much stimulus; an effort to combat the deflationary forces that are in play.

[Investopedia](https://www.investopedia.com/terms/d/deflation.asp) defines inflation as such:

>Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy. During deflation, the purchasing power of currency rises over time.

Unfortunately, this is a Keynesian Economics view of things.  Circumstances are proving that the Central Banks do not produce the results many give them credit for.

The deflation we are seeing has nothing to do with the money supply.  What we are seeing is a total confidence crisis.  This is going to continue for some time regardless of the stimulus put forth.

What is interesting is this is a temporary situation.  We will see confidence return at some point.  There are two other causes of deflation that are not going to change any time soon.

<center>https://d33wjekvz3zs1a.cloudfront.net/wp-content/uploads/2018/03/Inflation-Deflation.jpg
[Source](https://d33wjekvz3zs1a.cloudfront.net/wp-content/uploads/2018/03/Inflation-Deflation.jpg)</center>

The first is demographics.  Aging populations are extremely deflationary.  As people get older, they tend to spend less.  Kids are out of the house and most major purchases are completed.  

Japan started their deflationary death roll in the 1990s.  For the last 20 years, Japan has gotten older.  Deflation was present even though the central bank threw everything they could at it.

The United States and China are following behind Japan in this area.  As the Baby Boomers start to enter retirement, the demographic impact on society is going to be profound.

Another condition of deflation is technology.  By its nature, technology is deflationary.  Actually, it is more accurate to state *technology is EXTREMELY deflationary*.  When one looks at the Federal Reserve's inflation mandate of 2%, it is easy to see how technology's deflationary rate dwarfs it.

Anything that falls under the Laws of I.T. deflate at a pace of 17%-50% annually.   

Therefore, unless one believes that technology, as a percentage of the global economy is going to decrease. deflation is going to be our new norm.  

This will all prove that the Central Bank, as the controller of the economy, is a misguided belief system.  The last decade should have driven this point home to everyone but it did not.  Over the next 10 years, we will see both the aging population and technological expansion continue at a rapid rate.  

Again, this will have a profound impact on the global economy.  The key here is technology.  That advances faster than any other factor.

Thus, do not buy into the claims that we are looking at hyper-inflation as a result of the actions being taken during this crisis.

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