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Deflation means I have no motivation to spend today for a small car, when I know I can get an apartment for this money in a few years. Sounds good doesent it,
by tineo 4y ago
Deflation means I have no motivation to spend today for a small car, when I know I can get an apartment for this money in a few years.
Sounds good doesent it, saving is good.
But it also means the company selling that small car wont sell that car, meaning they wont produce as many, meaning they wont employ as many people.
Essentially demand would go down to only essentials, supply would follow, unemployment would skyrocket, total production would plummet.
You dont want the Japan example, then how about The Great Depression.
Inflation on the other hand encourages spending, increases total economic output and encourages investment.
A deflationary store of value is good, and an inflationary currency is good. The problem is that crypto is trying to be both, so its failing at both.