Quote from: Impaler on May 05, 2013, 01:49:41 AM

No one denies that the supply of money is a FACTOR that can contribute to inflation/deflation, and yes how new money is added (or old money removed) has massive effects and has to go through a messy process of rippling through the economy to rediscover new equilibrium points (and some people get screwed in this process). None of that is even remotely in dispute, you seem to be assuming I support inflation simply because I don't spit on Keynes grave every time I mention him as is the normal etiquette here on the forums.

I am simply arguing that deflation/inflation as terms describing the change in the purchasing power of money are useful and meaningful and the orthodox meaning of these words amongst ALL economists. The deeper ramifications, goodness badness, supply vs demand side mumbo-jumbo is irreverent here because I'm just trying to point out that semantically their is no disagreement.

My point wasn't that you're arguing for or against inflation, but in regards to the use of terms, inflation and deflation are actually quite good for both price and supply issues. This is why I personally just say "price inflation" or "deflation of the supply of X" because it tends to get over this semantic hurdle with most people while still applying the ideas of inflation and deflation to both spheres.

Quote from: Impaler on May 05, 2013, 01:49:41 AM

And I have no idea what your lost wallet statement is supposed to mean as that's not inflationary by anyone's book, losing a crytpo coin wallet decreases money supply and all things being equal will cause deflation if it is not being offset by an equivalent decline in demand for money. Mises and Keynes agree on this simple point.

This is why I said that it's exactly the opposite of the inflationary mechanism. The point was that the first person to lose the currency is the worst off while the last ones to adjust (rather, to be forced to adjust) to that pricing shift are the best off. It was just inverting the issue to try to make the point about the necessity of qualitative analysis rather than looking at the aggregates of price inflation and deflation.

Quote from: BTConomist on May 05, 2013, 04:27:28 AM

Hopefully these badly-structured sentences were somewhat helpful in shining some light on why the increase in the underlying value of a currency is derived from the assumptions/projections about the increase in economic activity, rather than the increase in trading activity (i.e. back and forth buying/selling BTCs for USDs). Unfortunately, the only way to increase economic activity in a market-driven economy is to increase consumption of products/services produced in that economy this is what I call the increase in spending. And when it comes to BTC-based economics, deflation is just a pretentious way of saying inflation.

If you're trying to relate Bitcoin deflation to the relative inflation of the Dollar against Bitcoin, then sure...... But that doesn't really make a meaningful point above and beyond saying that Bitcoin has deflated relative to the Dollar...

I'm not really sure where you're going with all of that. In terms of spending more in an economy, if the size of the market of goods being bought using the currency increases at a faster rate than the reduction in hording, then price deflation will occur even as the supply of currency being circulated is inflated... But that's completely relative... So again, I'm not really sure where you're going with all of this.