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The problem with deflation though is that it encourages people to save them and not spend them. Why would you create a currency which is meant to deflate? In mo
by grantbachman 16y ago
The problem with deflation though is that it encourages people to save them and not spend them. Why would you create a currency which is meant to deflate? In most cases, deflation is worse than inflation.
- grovulent 16y agoThat's because in a debt based economy, deflation means a shrinking of the money supply, and a shrinking of the money supply means less money is being lent, and less money being lent means economic stagnation. An economy based on bitcoins couldn't work like this - because deflation doesn't shrink the money supply, and doesn't necessarily have anything to do with less money being lent.