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>Deflation is actually a good thing, because in a deflation prices drop and money becomes more valuable, so deflation encourages people to save money.

And saving is always good. (Except when it isn't.)

Do you know what happens to nominal investment returns during a period of deflation? They become negative. The money will be worth more tomorrow than it is today if you "save" it -- not necessarily invest it, just save it. So why go out and invest it in something where you could risk losing your money if you can just stick it in your mattress and have it be worth more tomorrow?

In consequence the people with disposable income don't spend or invest, they "save" by purchasing and storing money, investing in currency itself because it has a better ROI than other alternatives. It's an economic catastrophe. It has been credited with causing the Great Depression.

There are ways to promote investment (as opposed to "saving") over spending if that's what you want to do. Adopt consumption-based taxes rather than income-based taxes so that wealth remains untaxed until spent, incentivizing investment over spending without promoting currency hoarding.

>They want to create as much money as they want, and assuming they always intend to do good things with the money, then they want to be able to do that so they can "fix" things.

Central banks don't really "decide" what to do with the money. The Fed just buys treasury securities with it, which lowers interest rates because it reduces the market supply of those securities by taking them off the open market. This generally does stimulate the economy because it puts the newly created money in the hands of whoever would otherwise have held those treasury securities, who as an investor will now have to invest in something else (because fewer treasury securities are now on the market). In other words, it creates demand for investment securities of all types by reducing the supply of the safest forms, pushing investors toward higher risk securities (like stocks) that may better provide funding for business opportunities that create economic growth.

It also has the effect of lowering interest rates on treasury securities, which makes it cheaper for governments to borrow money (and plausibly thereby increases their propensity for deficit spending). But it also lowers the interest rates they pay on outstanding debt, which leaves more tax dollars to go toward (theoretically) useful programs rather than going to paying higher interest rates on the debt. But creating the money is not the problem in itself (provided the level of inflation remains within reason), the problem is when governments take it as an opportunity to deficit spend on wasteful programs.

> But you don’t become wealthy by spending and consuming; you become wealthy by producing and saving

You can't be producing and saving without somebody consuming and spending (unless by 'saving' you mean just hoarding the stuff you produced, but even then you have to be spending in order to produce)

It's incredible that people don't realize that a modern economy doesn't really save anything. We're not hoarding away bales of hay and sacks of wheat for future use!

Well we do keep some commodity reserves, but these don't show up on anyone's account books as "savings". They show up as illiquid assets.

I know many people that save gold and silver

Total worldwide gold production amounts to $132 billion, or only 0.2% of world GDP. Even if we saved all the gold mined every year, it wouldn't support any substantial amount of real saving.

Gold and silver have very little inherent value, only trade value (other than a few industrial applications, but they can often be replaced by copper). We don't save very much food, or surplus housing, or surplus machinery or petroleum or solar panels, mostly because these things degrade physically and become obsolete when saved. Instead, we rely on today's economy to provide these things.

True, but we do accumulate wealth, in the form of houses, infrastructure and other quite permantent stuff.

We do, but our rate of nominal wealth accumulation bears no relation to the rate at which we accumulate tangible physical assets. Not to mention that most of those physical assets depreciate, which must be accounted for.

"There's also a strong case for deflation ..."

No there isn't. There's some fringe people like your citation that try and make the case but they're on the fringe for a reason.

Deflation is bad because if I can get more from my dollar tomorrow then I shouldn't buy your goods which means you shouldn't produce as many. This begins a downward spiral that leads the economy into recession/depression.

Now if you want to completely rebuild the economy from the ground up including the way investment, debt, currency and wages work you could probably do it so that deflation wasn't terrible but there's no evidence you won't end up breaking something else in the process (cf Law of Unintended Consequences). Meanwhile back in the real world we live in, deflation still sucks.

This isn't a strong case at all.