In the case of extreme deflation, although most assets in the market will depreciate, jewelry can rise against the trend because of its risk aversion.
Moreover, when deflation occurs, bank failures and stock market crashes bring panic to investors. At this time, many investors will hold a group on jewelry to resist risks.
The harm of deflation
1, accelerating economic recession
The price of raw materials fell, and the sales price fell. The most direct result is that the company's profits are decreasing until it loses money, and then it begins to lay off employees.
When most production enterprises encounter the same problem, a large number of people will lose their jobs. Originally, you thought it was a good thing to sell 10 yuan for eight pieces of rice, but suddenly you found that your job that earned 4,000 yuan a month was gone, and you couldn't buy that eight pieces of rice. This is the economic recession caused by deflation.
2. It may trigger a debt crisis.
Deflation is very destructive to debtors, which will make many people who have the ability to pay back the money unable to pay back, leading to a large-scale debt crisis.