Bitcoin News

Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis) shares the argument by Austrian economists that price deflation is nothing to fear.  Excerpts:

“Deflation is not a problem in the traditional monetary system and it will not be a problem in the bitcoin economy.”
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“Although the supply of [bitcoins] will be relatively static with the exception of attrition through permanently lost coins, I will refer to the monetary phenomenon as deflation because as bitcoin’s asset value increases compared to political numéraires, its effect on price expression will be seen as deflationary.”
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“An economy with a monetary unit that increases in value over time provides significant economic benefits such as near zero interest rates and increasing demand through lower prices.”
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“‘During an inflation, you want to get rid of the money. You want to consume. You want to spend. But you don’t become wealthy by spending and consuming; you become wealthy by producing and saving’ [writes Doug Casey, of Casey Research]”.
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“‘Deflation puts a break–at the very least a temporary break–on the further concentration and consolidation of power in the hands of the federal government and in particular in the executive branch.” [writes German economist Jörg Guido Hülsmann]”.
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“Ultimately, the market will reach an equilibrium between investment and savings because in the absence of an equilibrium the benefits of a savings-only strategy would evaporate. Proper economic growth through sound investments will lead to a productivity-driven deflation.”

- http://onforb.es/V03gqW
- http://bitcointalk.org/index.php?topic=133079.0

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