Re:The digital currencies that matter
by imtringued on Saturday May 08, 2021 @07:30AM
(#27086136)
From a consumer point of view it is a win, but you have to earn the money in the first place and that means over time your employer will have to cut your wages in nominal terms, because your real wage is going up year by year. Employers would demand deflation adjusted wages or just fire their overpaid employees.
Deflation is also a win for people who have inherited their wealth a long time ago, because they have to do absolutely nothing to protect their wealth. It's basically rent seeking but this time it is with money.
There is another problem, the real value of debt grows over time, which makes it harder to repay debts.
However, I will admit one thing, occasional deflation spikes are not a bad thing, if they are followed by inflation that meets the 2% target.
Deflation is also a win for people who have inherited their wealth a long time ago, because they have to do absolutely nothing to protect their wealth. It's basically rent seeking but this time it is with money.
There is another problem, the real value of debt grows over time, which makes it harder to repay debts.
However, I will admit one thing, occasional deflation spikes are not a bad thing, if they are followed by inflation that meets the 2% target.