[tony69]

Deflation is fairer and reduces moral hazard in finance. The weak point of gold is that it’s too slow to settle transactions (you have to move it), so a paper gold system on top of it inevitably arises. [0] “broken money” by Lyn Alden

[shash]

Deflation (defined as, the value of the currency goes up with time) means that prices go down with time. This however tends to accumulate wealth and not have it move around in the economy (it being more remunerative to hold on to your currency because its value increases). This makes it harder to run an economy because eventually, with a fixed supply, all the currency gets hoarded and only a bare minimum circulates to buy essentials.

A little inflation means that your currency buys stuff _today_ that's worth more than hoarding it for _tomorrow_, so you spend, vitalizing the economy.

The reality is, it needs to be balanced. There needs to be enough money in circulation such that economic activity is not stymied, but not so much that it starts price wars.

Kinda like blood sugar!

[tony69]

You have it reversed.

Currency inflation leads to unfair distribution because the value of financial assets grows faster than the real economy (it inflates).

Currency deflation benefits the poorer. As technology and productivity grow, it costs less to produce goods, so their prices should decrease.

The currency hoarding behavior that you describe is no different than today’s financial investment.

It is trivially easy to avoid the effects of inflation by investing - if you have assets to invest, that is. But if you live month to month, you get screwed by inflation, because your salary is sticky as prices rise.