Or maybe, srsly.
First off, we made the mistake of walking through Sears a couple days ago when we were wandering through the mall. There, we saw fleecy Levi's jeans jackets, an item that is memorable enough from both R.'s and my young adulthood that we remember precisely what we paid for ours. On sale. And let's just say that a solid two decades later, these jackets were regularly priced considerably less, and on sale even lower.
The last few days has seen a massive flight to quality, and the Fed seems to be engaging in a lot of talk about whether to cut further, which seems like a pointless waste of time because we all learned a long time ago that cutting to zero is inevitable in this situation. AND it won't do you any good. Japan (which is where we learned about this) went further, and engaged in banking innovations which amounted to negative interest rates on loaned money -- basically, if you were willing to borrow money, they'd pay you to take it.
So why wouldn't you do that?
Well, in the ordinary course of economic life, money is getting worth less every day. This is why everyone urges the retail investor to stay fully invested; staying in cash just guarantees that you lose money at the rate of inflation. But in a deflationary environment, cash is king. You may have had $5 yesterday, and $5 today, but if GM stock cost $50/share yesterday, and $4/share today, you'd rather have cash than GM shares (especially if GM is on its way to zero, which under that scenario -- and in reality -- appears to be true).
Here's my question: what are _we_ going to do to convince people to borrow money? Right now, we're trying to convince lenders to loan money, on the assumption that people want to borrow. In the aggregate, however, people are pretty damn smart. Around the time we get the lenders to loan, we're going to discover that everyone has wised up and no longer wants to borrow. Well, except for GM.
ETA: Did that make sense? Here's another way to think about it. Would you borrow a dollar, if you knew that it would be harder to pay that dollar back tomorrow -- and harder still every day thereafter -- than it would be to pay that dollar back today? Borrowing a dollar when it's easier to pay it back tomorrow -- and practically effortless a decade hence -- is one thing. Once the population at large internalizes deflation, it's all over.