Quote from: johnyj on August 29, 2013, 01:00:59 PM

Quote from: crumbs on August 28, 2013, 10:51:51 PM

Quote from: johnyj on August 28, 2013, 10:37:15 PM

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I have proved that deflative currency will incentivise spending and discourage hoarding permanently when a certain amount of saving is done

Where? If you have, you're the only one.

It's very simple, just one more step: Deflative currency at first will encourage hoarding, but when people build up a reserve through hoarding, that reserve will increase in value over time, so you have a guaranteed income source, a secure net, that will encourage spending long term wise
https://bitcointalk.org/index.php?topic=277275.0

What happens to the economy during the hoarding period?
If my bitcoins consistently outperform running a business, why would i *ever* start spending? I'll just keep cashing out tiny fractions of my bitcoin stash, as its value keeps growing. Just like you described in your link.
Profit, foreverz!
What, other than my stupidity, would make me spend?

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Quote from: crumbs on August 28, 2013, 10:51:51 PM

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so this is not the real reason behind the adoption of inflative currency

You understand that fiat != inflationary currency, right? Fiat can also be deflationary, if that's what you want. Most people don't.

Debt based fiat money issuing must be inflationary, because you have to pring more money to pay back the interest. Look at the ever increasing national debt, without ever expanding money supply, it is not possible to pay back those debts' interest

Don't be silly -- you agree that the FED just prints more monyz whenever it feels like it, right? So they'll just burn some midnight oil at the money factory, and print up enough bills to pay off every debt.
Simple Cool

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Quote from: crumbs on August 28, 2013, 10:51:51 PM

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The real reason could be:

1. Without a fast circulation of money, the banks would not make enough income in interest

Why?

Commercial banks mostly living on the interest difference between loan and deposit. A deflative currency will encourage saving instead of borrowing, so banks will have no income. An inflative currency encourage borrowing, it can be loaned out many times through FRB, banks can make lots of profit during the process

Banks will profit the same way as Joe in the link you gave -- they'll just hold on to their money & it will grow & grow, no need to add water or lend. Deflationary money, remember? The value of the money banks hold will increase forever, without them doing a lick of work or taking any chances. Profit!

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Quote from: crumbs on August 28, 2013, 10:51:51 PM

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2. If people don't spend fiat money, then they don't need fiat money, then fiat money will lose its value quickly, the money printing scam will be discovered easily

So don't spend fiat money, don't use fiat money, and your problem's solved. Presto!

If no one is borrowing money from banks, banks will have huge problems. Their trick to keep the value of fiat money is to let the government borrow more and more from them

But *you* know it's just a trick, so don't use fiat. How much simpler can it be?
The governments will destroy themselves.
Just like with deflationary money, all we must do to profit is ... nothing!