Thanks for the reading material.  I'll look into it.


As to the bolded:  That is the big fallacy promulgated by the Monetarists which is nonsensical.  There is no logical reason why the money supply must increase at the same rate as economic output.  What is needed is greater resolution (divisibility) of the monetary unit.  With a more diverse market for goods of ever increasing quality and decreasing costs of production (to their commodity value lower bound, obviously) there is a need to refine the comparison of one item to the other in terms of the medium of exchange.  It is the arbitrage between the perceived value of the two items that the market is seeking to reduce to zero.  Any monetary unit with an arbitrary limit on division (say the dollar at $0.01) will fail as a means of comparison without revaluation.  This is ultimately why the Monetarists adopted the slow but steady inflation scheme as their preferred method.

Bitcoin has built into its structure nearly limitless divisibility.  Satoshi currently has 8 decimal places programmed in, but that number can be changed at will due to market pressures and the open-source nature of the software, if we're ever so fortunate to get to that point.

Ta,