Quote from: johnyj on March 06, 2015, 03:09:39 AM

All of these problem of deflation is based on one assumption that fiat money's value is constant, and it is used as a benchmark of value, which is not true

For example, when you see a house's price going up and everything else's price keep the same, you think it is the house become more valuable. But the reality is your dollar worth less and everything else also worth less against that house

Why people stubbornly use fiat money as a benchmark of value, like using meter to measure length and using minute to measure time?

If you give up the belief of absolute value of currency, then all the claimed problems of deflation will disappear: When price of something drops, the purchasing power of the currency is increasing, means productivity is higher thus everything become more and cheaper, people will spend more, just like when bitcoin reached $1200, the amount of spent bitcoin is highest

On enterprise side, although the amount of currency they earn decreased, but currency appreciated, their real income will increase, salary become cheaper, they could hire more people and drive larger projects. This also happened when bitcoin price reached $1000+, lots of projects were setup back then

So, the claim of deflation's negative impact is just based on a stubbornly hold belief that currency is a benchmark of value. In fact the whole modern monetary theory is constructed on this blind belief

A post full of misconceptions and delusions. Just a few notes below:

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If you give up the belief of absolute value of currency, then all the claimed problems of deflation will disappear: When price of something drops, the purchasing power of the currency is increasing, means productivity is higher thus everything become more and cheaper

Productivity, as per Wikipedia, is "an average measure of the efficiency of production. It can be expressed as the ratio of output to inputs [emphasis added] used in the production process, i.e. output per unit of input". As both output and input can be expressed in money terms, the money is effectively taken out of the equation, therefore the increase in the purchasing power has nothing to do with productivity.

Strictly speaking, it is not so simple, but your reasoning actually works against your assumption, i.e. it can be said that with the increase in purchasing power productivity is decreasing (since producers make less profit and can actually suffer losses).

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just like when bitcoin reached $1200, the amount of spent bitcoin is highest

Yes, people got rid of their bitcoins in every possible way (probably the only chance in our lifetime at such rates). And don't confuse speculation with consumption, which would most likely account for the increase in bitcoin turnover, if it did happen at all.

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On enterprise side, although the amount of currency they earn decreased, but currency appreciated, their real income will increase, salary become cheaper, they could hire more people and drive larger projects. This also happened when bitcoin price reached $1000+, lots of projects were setup back then

In real life, producers' profits may turn negative due to decreased prices. But negative is negative, and you can't do anything about it, deflation or not. What you say is probably the most common mistake people make when they discuss deflation "on enterprise side". In short, deflation is not a mirror reflection of inflation (as many erroneously believe).