While I can't say with certainty whether mild and predictable deflation is bad for the economy, I don't think that these standard arguments that are used are sufficiently persuasive.<p>1) It is clear that a deflationary spiral, defined as possessing the characteristics of being unexpected, not written into contracts or loans, and relatively severe (double digits) while accelerating is bad. The great depression makes this clear. We can also see it in the current Greek situation. However, runaway inflation is equally bad, as we can see from post WW1 Germany, and modern day Venezuela and Argentina. Is it the fact that the change in the buying power of money is large and unexpected, or is it the sign of the inflation percentage that is bad?<p>2) Under the current debt based money system, the negative effects of inflation fall primarily on the poor. The wealthy purchase government bonds, which protect them inflation. They also have bank accounts, or finance debt either directly or indirectly. This means that instead of inflation falling on the populace evenly, it falls doubly on the poor.<p>3) Under a constant money supply system that eschews debt, the rich must seek out investment that actually increases productivity, rather than doing parasitic zero-sum investments (such as bond purchases and loan giving) that merely transfer value from one person to another. This would tend to grow the economy faster.<p>4) Under a constant money supply (like Bitcoin in a few years), wages and prices would tend fall by however much the economy was growing (2% - 3% a year), but the raises that people give out for seniority would tend to overwhelm the wage issues.
This proposal has nothing to do with Bitcoin, though. This FT-coin is a currency (parallel to the Euro) issued by a central authority, just as any other fiat currency.<p>This is completely different from Bitcoin, whose value arises from the cost of mining (hardware purchase, power, maintenance, and time spent), and people's willingness to exchange that for other currencies and/or goods.
Along with,
<a href="http://yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dangerous-fantasy-of-apolitical-money/" rel="nofollow">http://yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dangero...</a><p>I'd ask him one question: how is the idea of regulated, political and centralized money working out for you?
This is actually nothing to do with Bitcoin - it's about using blockchain technology to issue what is effectively government debt in crypto-currency form - i.e. what Overstock have done.
He agrees that there are a lot of goods and services that are getting cheaper. But then he says that they only are getting cheaper because the buyer spends more time informing himself and not just because time passes by. This is wrong. There are widespread deflationary effects in current economies.
as if greece was a-ok when it had the drachma. exposes the underlying problem that the greek economy in itself is pretty useless, hence all the drama right now is focused on financial shenanigans.<p>the EU expansion to the east broke greece's neck. a well educated, motivated workforce entered the EU, but smartly like Poland did not join the Euro. Amazing growth in Poland throughout the crisis of the last 7-8 years, catastrophe in Greece.<p>See comments from Lithuania's prime minister and others who are getting fed up with Greece.<p>Interestingely enough this fits Samuel P. Huntington's predictions of the Clash of Cultures. He had Greece as part of the orthodox area, separated from catholic/protestant Europe which spanned from UK to Poland. He got a lot of shit for his theories at the time, was quite prescient in hindsight.
Yet another "deflation is bad hence bitcoin is bad" post, except due to the rate of mining Bitcoin has been highly inflationary if anything.<p>See this graph
<a href="http://i.imgur.com/vRsIMvt.png" rel="nofollow">http://i.imgur.com/vRsIMvt.png</a><p>edit: Oh I see now who the author is :D well euros or bitcoins the way Greece is going inlation or deflation will be the least of their worries....
Saying deflation is the cause of a bad economy is like saying a wet head causes rain.<p>Chain of causation is:
money printing used to buy debt ->
underpricing of debt risk ->
unsustainable debt funded malinvestment ->
debt collapse ->
deflation as effective money supply shrinks<p>The irony is that they use fear of deflation to justify the very act that causes the malinvestment and debt collapse.
Bitcoin has its biggest potential these days.
E.g.
<a href="http://www.reuters.com/article/2015/07/03/us-eurozone-greece-bitcoin-idUSKCN0PD1B420150703" rel="nofollow">http://www.reuters.com/article/2015/07/03/us-eurozone-greece...</a>
However, Coinbase is not accessible for greeks. So, I would count it as huge lost opportunity.