> The idea that deflation is necessarily harmful to an economy is a fallacy. Well, it is undeniable that this is subject to very heated debate. Some people are

> The idea that deflation is necessarily harmful to an economy is a fallacy. Well, it is undeniable that this is subject to very heated debate. Some people are monetarist, some people are not, and central bank policies shift from country to country and from generation to generation. For instance, Spain and the UK had very similar debt and deficit figures at the outset of the recession, but Spain does not control the value of its currency. The Euro is controlled by the European Central Bank, and is run primarily by German central bankers, who are strongly opposed to inflation as a lever of policy. The UK controls its own currency, and has deliberately pursued an inflationary monetary policy, and even more so with the newly appointed head of the Bank of England, Mark Carney. It is a very common opinion, in the US and the UK as well as in parts of Europe, that this is a key reason why the UK economy is doing ok, with 7.5% unemployment, while the Spanish economy remains in freefall, with 25% unemployment. Certainly, one academic study plucked off the internet, written before the current financial crisis, is unlikely to settle the issue for all time. Bitcoin effectively allows individuals to bypass this debate, and put their money where they think is appropriate. But, of course, the individual who is saving money always wants to avoid inflation, so will put their money where it will maintain its value. Whether this is positive, or indeed sustainable for the rest of the economy, is, as I say, a matter for debate.