You didn't answer this my post:
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?
I just did. Twice already. You make $20 profit in the 3 cases.
Except that you refuse to consider that nominal interest rate is higher when there is inflation than when there is deflation. That's my whole point.
You didn't, and I already explained why (since in your examples there is no real deflation).
There is initially no inflation and no deflation, but zero interest rates, both nominal and real, so nothing favors either pro-inflation or pro-deflation view. I'm still waiting, explain to me how deflation will mirror inflation when they set in. Your profit margin is 2%, inflation and deflation are 5% each at the end of the production cycle.