/DoD/ Dreaming of Deflation General

ITT: We discuss the benefits of deflation. The reason Gen Z and Millennials can't afford a house, a car, a family, or even groceries these days, is because of inflation, not deflation.

What is frequently called "deflation" is in fact "price deflation", as opposed to "monetary deflation". The definition of price deflation is "reduction of the general level of prices in an economy". A synonym for "price deflation" is thus "enrichment" or "abundance". In spite of this, price deflation is demonized and price inflation deemed a necessary evil. Here we compile apologia for price deflation and rebuttals for the completely undesirable price inflation.

Basic price deflation facts:

Definition of "Price deflation": "Deflation is when the general price levels in a country are falling"

Definition of "Enrichment": "the process of making someone wealthy or wealthier." where "wealth" means "an abundance of valuable possessions or money" or "a plentiful supply of a particular desirable thing."

Price deflation is literally a synonym of "enrichment".

Ceteris paribus, price deflation is desirable. Hence, price deflation which happens due to increased efficiency in production and in distribution is unambiguously desirable.

Purpose of this thread:
Make people realize that price deflation, i.e. general decreases in prices, resulting from increased efficiency in production and in distribution, which the central banks' 2% price inflation goals literally prevent from happening, is DESIRABLE and will not lead to economic devastation for whatever reason.

Useful and educational reading material:

mises.org/mises-wire/cnn-wrong-deflation-good-thing

bruegel.org/blog-post/deflation-naysayers

financialsamurai.com/benefits-of-deflation/

political-economy.com/why-deflation-is-good-and-which-economists-support-letting-prices-fall/

medium.com/said-differently/the-price-of-tomorrow-why-deflation-is-the-key-to-an-abundant-future-231aea5df759

Benefit of deflation

It beats anarchy. the end

A 2% rate of infllation is in actuality a 2% rate of impoverishment. We have had steady 2% price inflation and predictably, this has led to increases in prices. Having a "moderate" impoverishment rate is still an impoverishment rate. General decreases in prices (price deflation) are GOOD: if you disagree, then why not pay MORE for goods?

"Inflation" and "deflation" are just hocus pocus to avoid talking about "purchasing power."

Zimbabwe experienced severe hyperinflation, reaching peak levels in 2008, with monthly inflation rates exceeding 79.6 billion percent.
This hyperinflation was a result of the government printing money to finance deficits and was one of the worst in history. The Zimbabwean dollar lost its value, and the government eventually abandoned it in 2009.

Causes of Zimbabwe's Hyperinflation:

Economic mismanagement:

The government financed budget deficits by printing money, leading to a rapid increase in the money supply.

Land reform:

The forced seizure of commercial farms led to a decline in agricultural production, further straining the economy.

Military spending:

Military adventures and reckless spending contributed to exploding budget deficits.

Global economic shocks:

Consequences of Hyperinflation:

Loss of value of the currency: The >Zimbabwean dollar became virtually worthless.

De facto dollarization: People increasingly used foreign currencies like the US dollar for transactions.

Economic disruption: Businesses closed, investment declined, and normal economic activity was severely affected.

Barter economy: People resorted to bartering to exchange goods and services.

Lost savings: People's savings were wiped out.

Wow! Sure does sound familiar doesn't it?

In 2021, a rapid expansion of the US money supply, particularly M2, was observed, coinciding with a significant surge in inflation. This rapid increase in the money supply, largely driven by the Federal Reserve's response to the COVID-19 pandemic, fueled inflationary pressures. The increase in money supply was unprecedented, exceeding previous historical benchmarks.

Rapid Money Supply Growth:

From February 2020 to February 2021, the US money supply increased by 26.6%, and from February 2021 to February 2022, by another 12.3%, according to the College of Coastal Georgia. This rapid growth in M2 (a broad measure of the money supply) was a key factor in the inflation surge.

Deflation is synonymous with purchasing power. They virtually mean the exact same thing.

you can never have an overabundance of supply because producers will simply stop producing.

a 2% rate of impoverishment

It's a tax on savings to incentivize growth, productivity, and investment.

Yes but one is easy to understand and the other isn't.

Say "the dollar is increasing in purchasing power" and it inspires consumer confidence. Say "the dollar is deflating" and people frown.

Plus like for real we're a web3 world now. Do we want to talk about "Etherium inflation" or decrease in ETH's purchasing power. Get more than one means of exchange involved and the conversation becomes very hard to follow.

But if plebs are getting rich without buying my bags at the pico top, who will buy my bags at the pico top? Checkmate Mr. Kumbaya Make the Whole World Prosperous

You wouldn't need someone to buy your bags because you could stick your cash money in a savings account and earn 20% interest every year risk-free just for doing nothing like the Fed Chair Paul Volcker days of the 1980s. This is literally the start to how Boomers became rich, along with working high paying jobs in a deflationary economic environment where houses and other tangible assets were dirt cheap... not from meme stocks and shitcoins like you've been lied to believe. The well paying jobs they worked at the time had the added bonus of actually contributing to a functioning and working society, and not this retarded meme economy where retards lose all their money on 0dte option calls or retarded women become multi-millionaires from flashing their tits on OnlyFans.

This is a surprisingly cogent point. The boomer economy turned a giant game of keepaway. Women now derive economic value from playing keepaway with sex while selling their own image. This can't really be described in inflationary terms, but its clear that the purchasing power of the average male has decreased significantly because of the technology enabling them to do this being widely available. Conversely, the women have very little to spend money on other than drugs, so their purchasing power is stronger than ever.

In the end, it's really all just about who you can Other.

Imagine for a moment that I’m not a neet with a $5k portfolio but an inheritor to the Rothschild fortune and among the most powerful elite with unfathomable influence in global politics, why would I allow to shift the power dynamic in favor of the average hardworking citizen?

Ceteris paribus, price deflation is desirable

It isn't. Neither deflation or inflation are desirable. Borrowers get absolutely fucked under deflation and the economy slows down because why spend today when it'll be cheaper tomorrow?

at the current stage its playing with the possibility of your head getting removed from your shoulders, with every boomer dying the probability increasing

believing this in 2025 is fucking insane lol. Imagine being on Anon Babble this late in the game and not even getting an iota of why bitcoin will succeed. Bro's brewing generational poverty lmao.

Women now derive economic value

I wasn't intending on bringing this topic up or going in this direction, as it is a whole other conversation that really deserves its own thread, but I'll just say one of the main drivers of inflation today, besides the M2 money supply expansion from 2021, was putting the majority of purchasing power of the US dollar, credit cards and pretty much the entire consumer economy in the hands of women. Women have no impulse control and only live for short term dopamine rushes in the moment, this has had the end of result on nonstop, mindless consumption and consumer gluttony on an entire differently level never seen in years past before, spiking prices and demand for mindless slop to sky high levels. They cannot stop spending and if we don't literally take money out of their hands, it is over for all of our futures. Our savings will widdle away to 0 and all our money will be worthless. OnlyFans, DEI careers and social media has only accelerated and compounded female consumption, and thus inflation, over the past few tears. Deflation is once again the one and true only answer, and great liberator from this tyranny.

This is your brain when infected with Inflation Rot

You're just mad because you've been made Other.

You have to haze a new guy. It doesn't matter who the Other is at all. Power only exists as the inverse of powerlessness. Just go out there and Other someone. Other a whole demographic if you want. The target isn't important, just the dynamic.

Our savings will widdle away to 0 and all our money will be worthless

Its already worth less than worthless, its uncovered debt that if it wasn't collaterized by the public, had to be defaulted a long time ago. Elvis was a mistake, he might have driven sales but at what price. A grotesque Faustian bargain giving bitches cash flow

Deflation is the great equalizer. It is the intellectual's weapon of choice to free us from this rotting order that's taken ahold of this country and the global economy since the 2008 Great Financial Crisis. Just as the deflation of the 2008 Great Financial Crisis changed the hands of the country and global order towards the liberal/Obama/progressive policies we have seen of the past 15 years, so too could another deflationary event change the global order again away from their insanity that they've subjected us too since then.

Shills already building the narrative for how markets go down a good thing holy kek. Unfortunately for you OP Trump will shoot you in the foot because this will become a full blown depression.

Inflation makes it easier to pay down my mortgate. Fuck you

Friend,

The point of the economy is that it's participants are unequal. No one's looking for a great equalizer. We are looking to subjugate and dominate the Other.

I hope you understand.

If you didn't have inflation you could've bought your house with cash and never had a mortgage, you stupid dumb fucking mouth breather. People like you should not be allowed to vote.

this will become a full blown depression.

Cope. You and your DEI hire friends losing your worthless, overpaid, do-nothing jobs =/= depression.

Deflation is possibly supported by mainstream economics with a digital currency that allows for negative interest rates. Mainstream economic policy supports stable price currency, and this is achieved by changing interest rates up/down to increase/decrease the amount of money creation. By shear physical limitations of the implements of money, paper, coinage, etc. this required that inflation generally be above 0% so that a interest rates can be lowered if need be. So you may have a currency with 2% inflation but a 2% interest rate. Its not actually "inflationary" from a holders perspective, so its functionally equivalent to a 0% inflation currency with 0% interest rates. Except it does have negative psychological effects in that the working class tend to have most of their savings and income in fixed savings / wages, while the rich have variable investment / business income. So overtime this slight inflation tends to suppress worker wages to the benefit of capital.

Now if you had a digital currency, you could have the exact same monetary system we have now, except target 0% inflation. Because with a digital currency you can just reduce peoples balances at a steady rate to implement a negative interest rate. There is no need to give room to lower rates in times of crises.

Now there are still tons of problems with this system. Like how we define inflation, who decides to raise / lower rates? Is the government even capably of doing so effectively. But this is separate from whether there is a deflationary unit or not, or whether its positive or negative yield as an asset.

Is there a coin that mimics this?

To add on, there are a lot more technical capabilities we have today that might make deflationary, fixed supply currencies viable. The reason we have stable-unit, variable supply currencies is because business contracts incl. loans and what not are all written in terms of the currency, and so volatile changes in the value of the unit fuck up these contracts and makes long term planning harder. So the government stepped into to create a system with a very stable unit value, running massive data collection programs to estimate inflation and interest rates.

Today we have a lot more data collect capability, and we have very well connected global markets with much more easily accessible data. We have the ability to make programmable contracts that could be take changes in price and rates into account. Including things like digital price tags rather than paper. So it may be viable some day to switch to a fixed supply currency, with volatile unit value, and everything is dynamically updated based on available date. Then you wouldn't need one centralized agency like a government who could make mistakes or be corrupted, and the free market can pick how to determine inflation and rates rather than have to use the government's version of inflation.

Its basically a CBDC. The problem is there is massive privacy and censorship concerns, so people tend to hate CBDCs in favor of cash which is essentially an extremely decentralized system, but again, cash can't have a negative interest rate so you are stuck with some slight inflation to allow for lowering rates when needed to avoid deflationary spirals where everyone bank runs to hoard cash.

Conspiracy theories that I've heard about CBDCs are control over what you spend your money on in accordance with some asset or industry that some centralized authority declares to be too inflationary or deflationary. Also the function of burning coins forcing you to spend your CBDC in a certain amount of time before it is essentially deleted. I cannot confirm these things though, its just been rampant speculation about these things with no verification to back it up. The functions and features you describe do sound interesting though. It's always good to hear a different viewpoint on a controversial subject matter.

if it is possible, somebody is going to do it - paper law is no shield against entropy

This is interesting. Is there an official white paper available of some sort that goes more into depth?

Yeah, its programmable, so the government has a lot more control to do any of those things. IF the government embraced a limited touch, free market approach, then they could implement it pretty well. If the government is stupid or corrupt, it gives them immense power.

Like a good implementation would be, if possible, something like Monero private transactions, and some type of guaranteed limit on the powers of the central bank, like setting a balance re-denomination rate to implement over night rates, and hooks to exchange different duration derivatives of the currency to reproduce government debt like treasuries.

But CBDC proposals tend to be highly centralized and have no protections on what the gov may end up wanting to do in the future even if they promise not to do it now.

Not that I know of. Its just my thoughts. But if you find anything post it.

One of the craziest parts of the past eighty-or-so years of propaganda is that the ruling class somehow managed to convince people that your money gaining more and more value over time, just by sitting there, is not just bad for you, but is utterly catastrophic and *must* be avoided at all costs.

No, you see, it is absolutely imperative that your savings lose 2-3% of its value (really more like 6-7%, and recently more like 10-11%) each year, automatically. Here's some word salad written by The Experts to show you how silly you were for thinking otherwise.

Not gonna dispute the deleterious effects of OF, DEI, etc., but I really don't think consumer debt accounts for that much of the M2 money supply expansion. The amount which the state spends utterly trivializes what any number of women could spend on expensive clothes and jewelry. I certainly think that overconsumption on shiny baubles is a *symptom* of inflation (because you might as well spend if your money is just going to lose value anyway, unless you've got enough money and enough sense to invest wisely), but I'm skeptical that it's a cause.

The point of the economy is to exchange goods and services under conditions of scarce resources. What are you going on about?

I understand all this shit pretty deep but it really all comes down to this, the rich own the assets, they own the Fed/gov, and the Fed/gov prints cash to avoid a collapse, and they get richer in the process. There is zero reason for this cycle to stop short of a huge crash, but short of that it'll just get worse and worse.

How is this wrong?

Not gonna dispute the deleterious effects of OF, DEI, etc., but I really don't think consumer debt accounts for that much of the M2 money supply expansion. The amount which the state spends utterly trivializes what any number of women could spend on expensive clothes and jewelry.

I don't disagree, but at the very least it must help sustain inflated prices and give companies the green light they are free and clear to continue to hike prices. Warren Buffet for instance always talk about a trusted brand's ability to command ever increasing higher and higher prices. If people, really mindless female consumers, continue to spend these higher and higher prices, it certainly does nothing to help or aid in bringing down prices to sane valuations. If consumers slow or stop spending, prices would have to come down to reasonably match the lower demand. If women and other mindless consumers with more credit cards than braincells continue to consume at inflated prices, then companies will continue to hike, or at least maintain, elevated prices far above sane valuations. IMHO.

It's certainly possible, and I haven't dug into those numbers myself. But a quick google search indicates that average credit card debt in America is $6380, which just doesn't even remotely cut it as a primary driver even if you assume every last penny of it was due to some frivilous luxury. Prices are generally driven up because the people who're closest to the money printer get "first dibs", and then you've just got more dollars chasing the same number of goods.

If people suddenly just decided to stop spending (which, again, there's just less incentive to do in an inflationary environment), I guess you'd probably see some level of price deflation. Like what you're saying makes sense conceptually. I don't think it'd be enough to significantly improve the lot of the average family, though. And it'd be undone immediately after the government spends well over $1 trillion more than it takes in.

it is absolutely imperative that your savings lose 2-3% of its value (really more like 6-7%, and recently more like 10-11%)

Its not designed like that tho. Its just a result of supply and demand for the currency. The currency exists within a market of alternatives, if the yield on cash is too low, then people will sell/lend it and you get a positive feedback loop of hyperinflation. Too high of an interest rate, and the reverse, everyone hoards the currency, and there is a lack of investment else where, under investment, and then it becomes exponentially harder to maintain the positive yield when productivity is dropping.

So my point is, the government doesn't really choose what the yield is on cash. And I'm talking about real yield here, since that's really what matters when it comes to "losing" its value. The market determines the yield and the government has to respond to the market. If you think yield is too low you just place less value on the currency than the market does. The US for example could have never just had higher interest rates or less inflation, it would have inevitably been unsustainable.