Quote from: dinofelis on March 27, 2015, 01:14:26 PM

Quote from: tee-rex on March 27, 2015, 10:38:38 AM

Okay, you borrow money at 0% interest rate (that means that you will have to return the same amount you borrowed, you name it), which is essentially the same if you just had that money. Inflation as well as deflation is 5%, your profit margin is 2%, when will you suffer losses, and when will you earn profits?

The point is that the nominal interest rate is not the same when there is inflation and when there is deflation.

Nominal interest rates (those you have to pay) will be much higher in an inflationary situation than in a deflationary situation. That's the whole point.

In the 70-ies, when there was 2-digit inflation, you also had 2-digit interest rates on a savings account for instance.

You were claiming that deflation is a mirror image of inflation, right? Now you seem to be backpedaling this issue, how come? Why don't you just accept that you were wrong?

We agreed to start at 0% inflation-deflation rate where nominal interests rates would be close to zero, then inflation-deflation would kick in. If the business was profitable at 0% inflation, it will most certainly stay profitable in the inflationary environment too, while in the deflationary environment it is not given, which can be proven mathematically. Deflation is not mirroring inflation!