Re:Lessons I Learned from the Dotcom Bubble for the Coming C...
by dmichulke on Monday May 29, 2017 @10:14AM
(#14439170)
Increase in production increases supply, so prices fall -> deflation.
Yes, inflation can have other reasons than debasement (for example, productivity decrease) but this affects both types of "money" - fiat and bitcoin, so I left it out to keep it simple
2% inflation doesn't mean the currency has been debased by 2%, it means: if it has become x% cheaper to produce a basket of goods -- and the price of this basket of goods has increased by 2% -- the currency has been devalued by (2+x)%.
Producers are constantly competing to cut the costs of production, in order to gain market share at the expense of competitors, so I don't see how flat prices can be a reasonable assumption.