Well, I was really describing a hypothetical situation where something like bitcoin was the main trading currency in an economy. In that situation bitcoin wouldn't have a price because there would not be a dollar with which to price it.

Lets say the size of the economy is "GDP" Bitcoin turnover per year. In other words, every year an amount of goods and services to the value of GDP (measured in BTC) is exchanged.

For a given monetary velocity (the GDP divided by the coin supply, or how many times the entire coin supply circulates on average), the relationship between prices of goods and GDP is linear. That means if the economy grows by 10%, prices have to decrease by 10%. If it contracts by 10%, prices have to increase by 10%.

This cannot work - for the reason I outlined in a previous post. Business go bust due to manufacturing cycles not coming in on budget and all sorts of unpredictability which is why the fiat system works as it does. It gets round this problem by creating new liquidity as it's needed and extinguishing old liquidity as economic expansion catches up with monetary inflation.

Even if this were not to happen (through the banking / credit creation system), the free market would just find a way to do it itself via the creation of hedging derivatives (and in fact already does in the case of international trade).

Thats why I'm saying that there'll always be these two parallel and complimentary dimensions to the monetary system and that will still be the case even if bitcoin becomes a mainstream asset.