You still don't see that it is not the same for deflation. In deflation you may end up with less money than you started with
No, you don't. Well, if you do, you will ALSO loose when there is inflation. Simply
because of the higher interest you have to pay on your loan of W.Imagine that you buy this year for $1000 of stuff, that the real interest rate is 6% and that inflation is 5%. This means that the nominal interest rate is 11%. You have borrowed your $1000,- at 11% interest rate.
Imagine your product is ready after a year, and it is worth 2% more in real terms as the cost. So it would have been sold at $1020,- this year, but because of inflation, you can ask $50 more for it next year (I'm not considering second-order effects).
So you can sell your stuff for $1070 next year. However, you have to pay $110 of interest on your loan. So net, you are LOOSING money: you gained $70 (20 value creation, and 50 inflation) but you have to pay $110 in interest), even though you sold for more than you bought.
---> $40 LOSS.
Now, consider 5% deflation. The nominal interest rate is now 1% (real interest rate remains 6%).
You have borrowed $1000 at 1%. You could again have sold your product this year at 1020, but because of deflation, you can only sell it for 50 less, that is, for $970. That's your thing: you can actually sell it for LESS money. Yes. But you only have to pay $10 as an interest.
So you've lost $30 on your sales, and you've lost $10 because of the interest: $40 LOSS.
The loss actually only comes about because of the difference of the REAL INTEREST and your ADDED VALUE.
The real interest rate was 6%, and your added value was only 2%. So you made a loss of 4% IN BOTH CASES.
Let us now consider a value creation of 15%, with the same numbers.
5% inflation: you could have sold your product this year for $1150, but because of inflation, you can sell it next year for $1200,-
You have to pay $110 interest on your loan, so your net gain is $90.
5% deflation: you could have sold your product this year for $1150, but because of deflation, you can only sell it for $1100.-
You have to pay $10 interest on your loan, so... your net gain is STILL $90.