Quote from: dinofelis on March 30, 2015, 05:24:46 AM

Quote from: twiifm on March 29, 2015, 10:19:27 PM

Yes yes yes! Dont know why nobody gets this. Most business depend on credit in some fashion. So a even a steady deflation rate will discourage borrowing which in turn discourage activity.

Could you please explain that to tee-rex who thinks that the amount of money blocked in the production process (that is, between the moment you need to spend it, and the moment you get to sell your production) has no cost.

You seem to be desperately trying to catch at a straw and again confuse different concepts, most likely through lack of knowledge or proper understanding. If businesses have a high profit margin, and there is plenty of demand for their goods, it is profitable for them to expand production through credit. Thereby they get more profit in absolute terms, even though their profit margin is diminished by the interest paid on debt.

And when demand collapses such companies are left with debts and the need to refinance these debts somehow.