Quote from: BTConomist on May 05, 2013, 02:29:20 PM

Oh... Now I see where our viewpoints diverge... When discussing inflation/deflation you are referring to the appreciation/depreciation of one currency against the other, whereas I'm referring to the appreciation/depreciation of a currency against the value of goods and services it is used to buy (as measured by the demand and supply of those goods and services, independent of any given currency). Thus, my argument about there not being a BTC-based deflation without the increase in BTC spending basically comes down to the notion that we can't say whether BTC is deflating or inflating unless it is being used to buy goods and services directly.

When looking at an economy wherein two units of exchange are used and there is significant enough opportunities to execute arbitrage, comparing the two currencies against each other for price inflation/deflation is sufficient to establish price inflation/deflation of either currency, supposing that prices accounted for in one of the two currencies is stable as is the case with dollars.

I think what you're really trying to say, however, is that Bitcoin can't deflate if it isn't used as a currency in the first place.

Quote from: johnyj on May 05, 2013, 06:31:34 PM

Fiat money has been inflated by a 400% since 2008, that is the inflation, but why the price of everything did not rise at least 200%? This just proved that inflative money will not necessary cause price rise, when majority of people are in panic mode, the money supply can increase by 10 fold without causing any significant price appreciation on goods and services, since everyone is saving

The price level is typically decided by consensus

What fiat money, and which measure of supply are you using to determine its inflation rate?

When looking at the dollar, it's really not very accurate to say that "the money supply" has been inflated by 400%.

M2 has a relatively insignificant (and already corrected for,) change in response to the 2005 housing bubble and subsequent 2008 financial collapse.
http://research.stlouisfed.org/fred2/series/M2

M1 on the other hand has just about doubled since 2008.
http://research.stlouisfed.org/fred2/series/M1

The monetary base, on the other hand (also called M0 in some circumstances,) is actually higher than M1.
http://research.stlouisfed.org/fred2/series/BASE

My point is that it isn't as simple as attempting to look at aggregates and ask for immediate results. Money is non-neutral and will take time to "feed" through the economy. There are also many other issues involved that I won't go into here because it would just take far too long and most people would probably get bored with the explanations.

Quote from: MPOE-PR on May 05, 2013, 07:07:42 PM

But aaanyway, you're not the first guy here intent on describing what "he thinks" rather than educating himself.

Isn't it interesting that you're somehow impervious to this fault, MPOE-PR? If I had a superpower, that would be it. Lucky for you, you obviously have that superpower already. I'm jealous.

drhobomanxxiii

Posts

Merits