Comment by PKop | Hacker News Reader

Comment by PKop | Hacker News Reader

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You've identified who suffers and who benefits from the reversing of value positions caused by deflation vs inflation.

But you haven't explained why its "worse"? So borrowers are disadvantaged compared to lenders (savers).

And wage earners are in a better position relative to wage payers.. ? That's what I take away from your statement.

But, one's ability to buy things seems to be improved...

Should we want an inflationary economy more college-tuition, healthcare-cost-like... or computing & software-like? Continually falling prices for all things computing related have done wonders for that industry no?

Would consumers be better or worse off having to spend less on food clothing housing energy? Would they have more or less disposable income with flat or falling prices?

Ok now assume increases in those costs... better or worse off? More or less disposable income?

> But, one's ability to buy things seems to be improved...

It's only improved if there is a lot of investment and new / more products coming out. deflationary currency promotes holding on to your money so that it goes up in value, but if everyone does that there will be less products / services and the value of the currency will ultimately go down. If currency has some inflation, then it's used as a transaction currency so that you want goods rather than currency, so the product becomes the important thing. If you have too much inflation however you get way too much money for the amount of products, so you want stable inflation.

Won't interest rates be low if everyone is saving?

Won't there be more investible cash because a lower percentage of one's wages is devoted to commodities, and essentials? As well, there is less of an incentive to stockpile or "get ahead" of future price increases.

So.. more left over to invest?

Does expectation of future flat or lower prices give you confidence to plan a vacation, invest extra money, etc.. or would you prefer to worry about food, gas, and other prices going up in the future? (along with your sticky wages making your real wage go down)

In fact, I 100% agree that savings and investment are key to future growth, technology and the whole enchilada. Which is why I don't support stealth tax of inflation, or of governments debasing the currency and stealing wealth from citizens.

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