Deflation was paired with economic growth in the United States under the gold standard for about 30 years at the end of the 19th century.
This was a good recent article on a related topic. Selgin is a well-known monetary economist:
When it's cheaper and easier to pull MORE gold out of the ground, that's not strictly speaking a fixed money supply.
When Rome (the empire) dumped a whole bunch of new found (stolen) gold on Rome (the city) that caused inflation too.
If your money supply is growing - it's growing.
Now if you have far too lose a monetary policy and you're inflating the money supply way too much and way too fast, that can be disastrous.
But if Alan Greenspan had found a way to convert led into gold, we would have gotten the real estate bubble even with a gold standard.
Under the gold standard, there is a feedback loop allowing the market to control inflation (that is, people can invest more or less in mining technologies/companies).
To some extent, this feedback loop also exists in a central banking system; it's far from being as efficient.
Why would one want to control inflation? Inflation does not have anything to do with economic health, does it? http://www.globalpolicy.org/socecon/bwi-wto/jubi2000.htm
below 40% inflation per year, 'there is no evidence that inflation is costly'. Furthermore, there is no evidence of a 'slippery slope' there is no evidence that one increase in inflation causes further increases. Thus 'the focus on inflation ... has led to macroeconomic policies which may not be the most conducive for long-term economic growth.'
In practice, gold supplies tend to be more predictable than central banks.
I think using a fiat currency is probably a good idea, though.
The money supply and interest rates being econ 101.
And thinking of hyper inflation, where does that usually happen?
Zimbabwe, Yugoslavia, the Weimar Republic - if a bad government wants to screw you, a gold backed currency won't save you. Does anyone think someone like Mugabe wouldn't just change the rules to do what ever he wants?
Besides, even that Money as Debt movie explains that gold is easily manipulated and thus volatile, so not good as a currency.
I believe there's been at least one major stock market crash that has not led to a recession.
Why?
Usually people just flee to the most convenient hard currency, like the US dollar, then every pay check is a race to convert it before its value drops.
But a lot of those paychecks are not inflation indexed.
Basically hyper inflation makes it impossibly hard to preserve any kind of liquid or semi-liquid wealth.
You can only hope to have all our wealth in things like real estate or perhaps gold. Although dry beans, rice and salted bacon are probably better then gold. You can't eat gold, and I'm not sure you can trade it for food in some of the worst parts of Zimbabwe.