Quote from: hugolp on July 14, 2011, 09:43:50 AM

Quote from: jtimon on July 14, 2011, 08:01:18 AM

Lowered prices don't stop consumption, falling prices do.

I dont see the difference. If prices are going down, they are lowered.

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Maybe the people who spend their bitcoins when their price in dollars rose were expecting the price to go down again.

Maybe, but they did not know. The probably just saw something cheap and bought it.

The difference is the trend. By lowered prices I mean prices that has become low, but won't keep on going down.
By falling prices a mean a predictable price deflation.
Of course, nobody knows what will happen in the future for sure.

Quote from: hugolp on July 14, 2011, 09:43:50 AM

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You said yourself that falling prices promote saving.

Yes, but this does not mean a reduction on consumption.

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On the other hand, as you say, lowered prices (or more valuable products) lead to consumption.
I don't understand how can growth lower interest rates.
It is really a complex topic.

Once people have their basic needs covered they can start thinking more about the future, meaning they can start saving more, which in turn lowers interest rates. When production grows, f.e. there is more or better food, prices go down, people can access those basic goods cheaper. With what they have left they can increase consumption, increase savings (thus lowering interest rates and promoting investment) or a combination of both.

I think I've get it. The increase in saving doesn't comes from a reduction in consumption but from a reduction in spending (while maintaining consumption). That makes sense.
I'm still confused about the relation between growth and interest rates. Doesn't seem obvious because there's a few factors.
At the same time growth increases the offer and the demand for money.