3 ms·

You are confusing deflation with inflation.

• landemva 5y ago
  A dozen yummy donuts experience 100% increase. A double so you now have two dozen yummy donuts. Inflation. A dozen peaches experience 100% deflation. They completely 100% go to zero. There are zero peaches. They are gone. What would 500% deflation do? Using regular math and experiences with donuts and peaches, what happens at theoretical 101% deflation? And 500% deflation? How can something be reduced more than 100%, the point at which it already disappeared?
  • diatone 5y ago
    Just confirming I’m on the right page here, what about supply and demand? Doesn’t inflation increase the quantity of cash in existence, reducing its value relative to other units of exchange, and vice versa for deflation? So for example, a 500% deflation just means that one dollar today buys $6 worth of whatever it could have bought in the past (my math might be off)?
  • pvitz 5y ago
    I am not talking about the rate, but rather about your sentence: > If currency loses 100% of value, it will be worth zero. A complete, 100%, total loss. Inflation is about the loss of value, not deflation. 1£ today will be worth x£ tomorrow, where x < 1.