system
Given the following post, respond as if you're commenting on Reddit:
human
Is deflation the real concern now?

Let's be real here, there is no way in h\*ll that the bank of Canada would let our country end up like Venezuela. If it needs to jack up rates like crazy, it will be a heavy pill to swallow but it will be done.

In the meantime however, while the central bank is in the process of monetary tightening, say there is a recession due to everything being so expensive.

People simply cannot afford it anymore and there is a pullback in consumption. Less consumption = less profits for companies = layoffs = higher unemployment = recession.

In ordinary circumstances, the central bank lowers rates and turns on the printing machine.

We, however, are not in normal circumstances and are instead in a high inflation environment.

In such a scenario, the central bank will have no tools to fight the recession, they can't lower rates when we are already struggling with high inflation.

Is deflation, hyper-deflation, and a great depression the real concern here now?
gpt
>they can't lower rates when we are already struggling with high inflation.

>Is deflation, hyper-deflation, and a great depression the real concern here now?

You're contradicting yourself. In this hypothetical situation is there high inflation where central banks can't lower rates anymore or is there deflation?

Also if a recession were to happen now and inflation fell to 0 or even negative what is stopping central banks from providing more QE.

>In ordinary circumstances, the central bank lowers rates and turns on the printing machine.

>We, however, are not in normal circumstances and are instead in a high inflation environment.

Your second statement doesn't match the first. The first states in normal times we could use QE. But the second statement says we have inflation and therefore don't even need monetary stimulus. It doesn't explain why we couldn't use monetary stimulus if we needed to.