--- title: "Meaning & Key Takeaway of: The way you create deflation is you…" description: "\"The way you create deflation is you create an asset bubble.\" — Stanley Druckenmiller" image: "https://sms4smile.com/quotes/i/d73/stanley-druckenmiller-14929_asset_the-way-you-create-deflation-is-you-crea_1296027.png" --- # The way you create deflation is you create an asset bubble. ![“The way you create deflation is you create an asset bubble.” quote by Stanley Druckenmiller](https://sms4smile.com/quotes/i/d73/stanley-druckenmiller-14929_asset_the-way-you-create-deflation-is-you-crea_1296027.png) [Download](https://sms4smile.com/quotes/i/d73/stanley-druckenmiller-14929_asset_the-way-you-create-deflation-is-you-crea_1296027.png) [Open image](https://sms4smile.com/quotes/i/d73/stanley-druckenmiller-14929_asset_the-way-you-create-deflation-is-you-crea_1296027.png) > “The way you create deflation is you create an asset bubble.” [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Creating deflation by reducing demand can inadvertently inflate asset prices, leading to a bubble. **In simple terms:** Deflation can cause asset bubbles. Key Takeaway Balance monetary policy carefully. Themes economics inflation deflation asset bubbles policy macro‑economics Mood cautious analytical informative Type financial economic When to use this quote - central bank decisions - housing market analysis - investment strategy planning Key Concepts monetary theory financial cycles risk management Questions to Reflect On - What indicators signal a bubble forming? - How can policymakers mitigate unintended asset inflation? A Different Perspective Bubbles may form despite policy intentions. ★ ★ ★ ★ ★ No ratings yet [Asset](https://sms4smile.com/quotes/about/asset/) [Asset Bubble](https://sms4smile.com/quotes/about/asset-bubble-1460152/) [Bubble](https://sms4smile.com/quotes/about/bubble/) [Create](https://sms4smile.com/quotes/about/create/) [Create Deflation](https://sms4smile.com/quotes/about/create-deflation-4238230/) [Customer](https://sms4smile.com/quotes/about/customer/) [Deflation](https://sms4smile.com/quotes/about/deflation/) [Deflation Create](https://sms4smile.com/quotes/about/deflation-create-4238231/) [Way](https://sms4smile.com/quotes/about/way/) ## Related quotes > [Every serious deflation I've looked at is preceded by an asset bubble, and then it bursts.](https://sms4smile.com/quotes/stanley-druckenmiller/every-serious-deflation-i-ve-looked-at-is-preceded-by-an-asset-bubble/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [The ultimate asset bubble is gold.](https://sms4smile.com/quotes/george-soros/the-ultimate-asset-bubble-is-gold/) [George Soros](https://sms4smile.com/quotes/author/george-soros/) > [Yellen’s comments suggest, and I agree, that we are in an asset bubble.](https://sms4smile.com/quotes/carl-icahn/yellen-s-comments-suggest-and-i-agree-that-we-are-in-an-asset-bubble/) [Carl Icahn](https://sms4smile.com/quotes/author/carl-icahn/) > [We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production,…](https://sms4smile.com/quotes/alan-greenspan/we-as-central-bankers-need-not-be-concerned-if-a-collapsing-financial/) [Alan Greenspan](https://sms4smile.com/quotes/author/alan-greenspan/) > [When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble…](https://sms4smile.com/quotes/george-soros/when-interest-rates-are-low-we-have-conditions-for-asset-bubbles-to/) [George Soros](https://sms4smile.com/quotes/author/george-soros/) > [With QE3, we are essentially being bought out with our own money...and unemployment is being used to facilitate this process in a very clever…](https://sms4smile.com/quotes/catherine-austin-fitts/with-qe3-we-are-essentially-being-bought-out-with-our-own-money-and/) [Catherine Austin Fitts](https://sms4smile.com/quotes/author/catherine-austin-fitts/) > [To face deflation, you have to have people accepting it and not reacting to it.](https://sms4smile.com/quotes/carlos-ghosn/to-face-deflation-you-have-to-have-people-accepting-it-and-not/) [Carlos Ghosn](https://sms4smile.com/quotes/author/carlos-ghosn/) > [I've learned about the inflation range situation. Obviously with our footballs being inflated to the 12.5-pound range, any deflation would then take us under…](https://sms4smile.com/quotes/bill-belichick/i-ve-learned-about-the-inflation-range-situation-obviously-with-our/) [Bill Belichick](https://sms4smile.com/quotes/author/bill-belichick/) > [Near-zero policy rates that may be considerably expansionary in an economy with high inflation could be contractionary when inflation is too close to zero,…](https://sms4smile.com/quotes/athanasios-orphanides/near-zero-policy-rates-that-may-be-considerably-expansionary-in-an/) [Athanasios Orphanides](https://sms4smile.com/quotes/author/athanasios-orphanides/) > [“It is one thing when prices drift downward over time due to innovation, scalability or other efficiencies. This might be considered “good” deflation and…](https://sms4smile.com/quotes/james-rickards/it-is-one-thing-when-prices-drift-downward-over-time-due-to/) [James Rickards](https://sms4smile.com/quotes/author/james-rickards/) > [“At the end of 2012, the yield on nominal bonds was about 2 percent. The only way that bonds could generate a 7.8 percent…](https://sms4smile.com/quotes/jeremy-j-siegel/at-the-end-of-2012-the-yield-on-nominal-bonds-was-about-2-percent-the/) [Jeremy J. Siegel](https://sms4smile.com/quotes/author/jeremy-j-siegel/) > [The United States and Europe are in a state of debt deflation, where people and businesses have to pay banks instead of spending their…](https://sms4smile.com/quotes/michael-hudson/the-united-states-and-europe-are-in-a-state-of-debt-deflation-where/) [Michael Hudson](https://sms4smile.com/quotes/author/michael-hudson/) > [ As a whole, \[changing\] is deflation force that is being underestimated. Whether each person thinks of it in the context of the word deflation… ](https://sms4smile.com/quotes/ken-moelis/as-a-whole-changing-is-deflation-force-that-is-being-underestimated/) [Ken Moelis](https://sms4smile.com/quotes/author/ken-moelis/) > [Despite the recent conviction of many that we're headed back to inflation, I think deflation remains the more likely prospect. You've just got too…](https://sms4smile.com/quotes/gary-shilling/despite-the-recent-conviction-of-many-that-we-re-headed-back-to/) [Gary Shilling](https://sms4smile.com/quotes/author/gary-shilling/) > [Deflation means a slowdown of income growth. Markets shrink, new capital investment and employment also taper off, so wages decline. That is what's happening…](https://sms4smile.com/quotes/michael-hudson/deflation-means-a-slowdown-of-income-growth-markets-shrink-new/) [Michael Hudson](https://sms4smile.com/quotes/author/michael-hudson/) ## More by Stanley Druckenmiller > [If you're early on in your career and they give you a choice between a great mentor or higher pay, take the mentor every…](https://sms4smile.com/quotes/stanley-druckenmiller/if-you-re-early-on-in-your-career-and-they-give-you-a-choice-between/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [Good debt growth is when you borrow money, and it goes into the real economy. You do capital spending. You build businesses.](https://sms4smile.com/quotes/stanley-druckenmiller/good-debt-growth-is-when-you-borrow-money-and-it-goes-into-the-real/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [With my business, the way you make big money is you find a great management team and a good concept, and you stick to…](https://sms4smile.com/quotes/stanley-druckenmiller/with-my-business-the-way-you-make-big-money-is-you-find-a-great/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [Soros is the best loss taker I've ever seen. He doesn't care whether he wins or loses on a trade. If a trade doesn't…](https://sms4smile.com/quotes/stanley-druckenmiller/soros-is-the-best-loss-taker-i-ve-ever-seen-he-doesn-t-care-whether/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [I think old people like Hillary Clinton and I shouldn't try and be cool with social networks, you know; maybe she should leave that…](https://sms4smile.com/quotes/stanley-druckenmiller/i-think-old-people-like-hillary-clinton-and-i-shouldn-t-try-and-be/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [Everyone sort of lives with their rulers in the past and doesn’t look at coming changes.](https://sms4smile.com/quotes/stanley-druckenmiller/everyone-sort-of-lives-with-their-rulers-in-the-past-and-doesn-t-look/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [In my experience, the more successful an idea is, the easier it is to fund it. 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They have not proved to me that, as a financial model and an economic model, it…](https://sms4smile.com/quotes/stanley-druckenmiller/i-don-t-put-tesla-in-the-amazon-category-they-have-not-proved-to-me/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [Whenever I see a stock market explode, six to 12 months later you are in a full blown recovery.](https://sms4smile.com/quotes/stanley-druckenmiller/whenever-i-see-a-stock-market-explode-six-to-12-months-later-you-are/) [Stanley Druckenmiller](https://sms4smile.com/quotes/author/stanley-druckenmiller/) > [If machines do everything well, including allocating capital and resources efficiently, can that be deflationary, can that eliminate poverty? I don't know. 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