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I think the point is more to do with savings: in a non-deflationary environment, you have the incentive to invest your savings in potentially productive use. In
by simonbyrne 9y ago
I think the point is more to do with savings: in a non-deflationary environment, you have the incentive to invest your savings in potentially productive use. In a deflationary environment the incentive is simply to hide your money under your mattress, which doesn't help anyone.
- makomk 9y agoThe trouble is, right now there seems to be a lot of savings sloshing around compared to the potentially productive uses they could be put to. So the price of every investment from houses to shares to made-up internet money is going through the roof as people look for somewhere, anywhere, they can put their money where it won't be eaten away by inflation.
- hndamien 9y agoThis isn't true. If you are hoarding Bitcoin and not putting it into productive use, you are reducing the supply. Thereby with constant demand the price should increase. In doing this, you have increased to wealth of others in the economy (of the currency) who can then put that into productive use where they believe they can generate gains above the rate of return of the expected deflation.