deisik: I feel your pain, debating these Troglodytes.
That said I think the Quantity Theory of Money could be of assistance. It is a simple and ancient formula that every economic school aknowleges.
The Formula is M * V = P * Q
M is Money Supply
V is Velocity, the number of times each money unit is transacted in the defined time period
P is the Price level of Goods and Services
Q is the Quantity of Goods and Services exchanged during the defined time period
All you are showing is the limits of the Fisher equation of exchange The equation is a tautology, causing more damage than good in understanding money.
When I am saying people will hold on to their money now and spend it later, that can be interpreted as lowering the velocity now, and increasing it later. Then you will understand that that is consistent with a stable price level and an increasing quantity of goods.
Are you familiar with the gold standard and the raging bimetalism debate of the late 19th century? William Jennings Bryan...Cross of Gold speech ring a bell?
When I am saying people will hold on to their money now and spend it later, that can be interpreted as lowering the velocity now, and increasing it later.
Economists say things like this as if they are real life. It's not that it isn't true, it's... "don't worry kids, we can eat next month, when people finally come back to shop for things again...maybe."
Deflation sucks... see pre-Keynesian history*
*Keynesianism sucks too.