Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?
Bitcoin isn't a real currency. Its a make believe toy. There aren't examples of deflation, there are examples of people waking up and the make believe thing being completely devalued
No true Scotsman fallacy. I think you'll find reasons to reject every single example of deflation anyone gives you because you've already made up your mind.
Well Bitcoin is still a terrible example. It's not a real currency, it's a store of value. Price volatility, insane transfer fees, and slow transaction speeds stop it from being used as a real currency.
Price volatility and high transfer fees are a direct result of it being deflationary. The only thing that's independent of that is the slow transaction speeds.
And every financial event has compounding reasons. I can always find multiple causes behind high inflation rates to invalidate your arguments about any currency.
Bitcoin isn't tied to ANYTHING. Its a completely made up thing. It isn't an actual example of what happens with a countries currency. This has nothing to do with true scotsmen. It was never a countries currency and it never had the same metric to determine its value and inflation or deflation.
I mean, fiat currency also isn't tied to anything. It's tied to the whims and fancies of the country's government / national bank, and most governments / national banks would want to maintain inflation.
But fine, deflation was also an amplifying cause of the Great Depression. But I guess your argument would now be that it wasn't the root cause, and therefore doesn't count. That's why I said no true Scotsman fallacy.
Fiat currency is make believe too. So many people believe in it that it is stable instead of volatile. But that doesn't mean it can't fluctuate and people lose confidence, which can cause it to become volatile without correction.
Bitcoin is not the best comparison because the supply is effectively capped, unlike fiat currency that can be printed as needed.
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u/StuartMcNight 8h ago
Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?