>modern economists agree deflation is an unhealthy sign in an economy
>economists who question this are considered fringe/quacks by the establishment
>inflation is what a healthy economy needs
>Israel the only significant economy with their own currency and deflation
whew, really made me think
>>inflation is what a healthy economy needs
Depends on how much, around 2% seems to be a nice amount. Some inflation makes it easier for prices to adjust (adjustment of wages etc etc.) and it's nice to have a margin of safety to deflation, which makes people reluctant to spend now (even though it's their preferences to spend now) since they might assume that prices will fall in the future and it might lead to problems with gov debt etc. ... Assuming that it's not too much (there are costs associated with it of course... like menu costs and it might discourage investment) and that it's fairly predictable.
When two caveman met they had problems trading objects so we looked for some way to store value, we discovered gold.
When we started travelling with ships we got fed up with pirates so people invented banking and used paper contracts as proof that you are entitled to X amount of gold on the other side of the ocean.
When the industry took of really bad we figured we need money faster than we could ever mine gold so the gold standard got abolished presuming the value that gets produced will back up the money later.
But now with production happening all across the fucking globe it's impossible for a country not to be in debt and the inflation/deflation won't prove jack shit.
Got it?
That depends.
Deflation can be bad in the sense that it discourages consumption (people tend to wait for the prices to drop more).
It also discourages investments.
The best is to have no inflation nor deflation or microscopic of both.
But deflation > inflation at equal rate.
It's a meme, tell me how did the first and second industrial revolutions happened if the investment were discouraged with the gold standard?
It's only since governments decided to micro-manage the economy that inflation suddenly became good.
But deflation > inflation at equal rate.
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the best investments, what you bequeath in your will, embody deflation: they take money permanently out of circulation.
>When the industry took of really bad we figured we need money faster than we could ever mine gold so the gold standard got abolished presuming the value that gets produced will back up the money later.
This is actually retarded. You can't "run out" of gold. If the economy doubles in size and the monetary supply stays the same, the gold just doubles in value.
>crashing the currency so people will hide their money in an investment portfolio
Jesus christ