Zeev's Turnips Patch-No Politics (ZEEV)

[Elroy Jetson]

Elroy:: A stable money supply [by this I assume you mean a supply that neither increases nor decreases by much] by definition will not likely lead to deflation. Inflation is the creation of paper money, that a moment ago, did not exist; eventually it diminishes the purchasing power of the dollars prior to the "inflating." Deflation is the dimunition of paper money. Inflation is not rising prices; rising prices are the result of inflation. The more inflation, the more the desire for gold; because gold cannot be counterfeited.

A stable money supply will lead to stable prices, abscent growth in productivity.

During periods of growth in productivity goods become cheaper, which by definition is deflation. This is both normal and beneficial.