Quote:
Originally Posted by Splorf22
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How can you possibly call this deflation?
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I'm not. We are absolutely, unequivocally, the literal definition of an
INflationary economy. We use a fiat currency (for good or ill) that is subject to manipulation by a specific manager.
My comment was directed at Ravager when he invoked the gold standard. It seemed, to me, that his tone was in support of the gold standard. To which I rebutted that the
gold standard is inherently DEflationary because the gold supply has, historically, always been less than the population's growth rate. Because, under a gold standard, population (hence demand) grows faster than the supply, the scarcity of money continually increases increasing its relative value.
Hence my remarks that a gold standard is deflationary. I then mentioned bimetallism (essentially a gold AND silver standard) as a wry reference as bimetallism has not been seriously discussed outside of academic circles (See: Friedman or Kindleberger) since the late 1800's.