Quote from: louisLavery on March 25, 2015, 08:50:20 PM

Quote from: tee-rex on March 25, 2015, 04:56:29 PM

Quote from: louisLavery on March 25, 2015, 08:39:04 AM

Like others have said, deflation, like inflation, is neither good or bad in and of themselves.

Inflation favours those with debt while penalising savers.
Deflation penalises those with debt while favouring savers.
For every argument for/against deflation there's a symmetric argument against/for inflation. So it seems to me 0% is best as it favours neither.

@tee-rex: By this you confirm that you don't understand how deflation impacts an economy, and that you didn't read the previous few pages of this thread where I explained it mathematically why deflation simply cannot be a mirror reflection of inflation.

You're right, I didn't read all the other pages,as there are 8, I think. I've now had a quick look through them but couldn't find your mathematical explanation as to why inflation and deflation are not mirror images. I'd be interested in seeing it so would be grateful if you'd say what number it is. Thanks.

BTW, this might be of interest to you and others, http://ftalphaville.ft.com/2015/03/23/2122452/economists-agree-deflation-is-either-good-or-bad-or-irrelevant/#respond

Below I cite three of my posts (emphasis added) relevant to the matter that pretty much explain this all. Note that I specifically point out that deflation is not a mirror image of inflation, since, obviously, you are not the first to come up with such an idea.

Quote from: tee-rex on March 06, 2015, 04:46:00 AM

Quote

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).

Quote from: tee-rex on March 06, 2015, 05:24:58 PM

I guess many have an intuitive assumption that company profits would be decreasing in proportion to the decrease in prices of the goods the company sells (hence comes the idea that their real income will increase despite the drop in prices).

This is flat-out wrong.

Quote from: tee-rex on March 07, 2015, 10:44:12 AM

There are two things to understand why the collapse in aggregate demand is bad (and very bad at that). First, it is enterprise that creates value, so it comes before anything else. Secondly, when prices are falling, it becomes more risky to run it, since you may end up with less money than if you weren't engaged in enterprise altogether.

Remember, negative remains negative, no matter what. In inflation profits in nominal terms increase, so you expect that in deflation they would decrease (thus mirroring inflation), while in reality profits not just decrease but can actually turn into losses.