Deflation is not a bad thing in all economic theories. An iPhone and many current food items would have cost millions a century ago, yet here we are, richer than ever.
" Although inflation causes generally rising prices, it should not be understood as detrimental to all parties involved. It is highly lucrative for the government and the banking industry. When new money is printed (today, created electronically), it greatly benefits the first recipient because assimilating the new money into the economic organism takes time. Those first recipients (government and banks) can purchase goods and services at the old prices. As the money slowly works its way through the economy prices are bid up. Eventually when it reaches the salaried workers, prices have mostly adjusted. This process is a hidden tax on salaried workers, or anyone who receives the money late in the cycle. It is especially detrimental to those on fixed incomes, such as pensioners. Not only does the government understate the effects of inflation in its official numbers, any price decrease that would have occurred as a result of productivity gains are denied to the consumer as well. Inflation is nothing but wealth transfer. The government prints money and buys stuff with it. Prices rise and the salaried worker can buy less stuff. All the stuff the salaried worker could have otherwise bought has accrued to the government. Simple. Politically, it is far more palatable than raising taxes because the process is badly understood and well obfuscated. "
http://austrianeco.blogspot.pt/2008/02/inflation-part-22.htm...
>The government prints money and buys stuff with it.
And this seems just wrong. In most economies the central bank and the government are sepparate and the government can't just create money to spend. But maybe that's what effectively happens in the end anyway?
Either way the economical argument is usually that you want a small steady inflation and that deflation is much worse. That doesn't refute it.
Normally you have two types of deflation, by increasing productivity that reduces prices and by lack of demand where prices are reduced to incentivise buying one is good the other is bad.
Building a new currency on Ethereum takes about a page of code.