Bitcoin is divisible to one tenth of it, if I remember correctly. Prices in bitcoins can be adjusted to reflect the deflation. Merchants are already using MtG

Bitcoin is divisible to one tenth of it, if I remember correctly. Prices in bitcoins can be adjusted to reflect the deflation. Merchants are already using MtGox API and ticker so they set a price in dollars, and the displayed price in bitcoins is updated as the BTC/USD exchange goes up or down in MtGox, automatically. Extending your argument, the Government could try to mess up buying up a lot of bitcoins, to force deflation, then selling them all to force inflation, and so on. Good luck with that, because that would be very expensive in dollars (buying high and selling low). And if the Federal Reserve did this with out-of-thin-air dollars, it would just weaken the dollar in the long term, what would be good for Bitcoin. Some people say the Fed has being trying this price suppression with gold. I don't know if that's true. But apparently nothing has stopped gold to go to the roof in the last 10 years.