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To: quakeroats
So cheaper computers are caused by deflation?

Cheaper computers are caused by higher productivity. When every price declines, that's deflation.

Not unless the gold disappeared into the ether.

You can have deflation even when the gold supply increases.

That is assuming all loans and notes were 100% backed as they should be.

Under a gold standard not all the money supply is backed by gold.

You are confusing purchasing power in a static money supply with money supply contraction.

Do you even know what the definition of deflation is?

Hello, hyperinflation. I'll be glad I bought gold if that day ever comes.

How is preventing a deflationary bank failure hyperinflation?

No, because he pays lower prices to his supplier and on and on.

So farmers aren't hurt by deflation? How about manufacturers? Employees?

No, they issued too much in the 20s which lead to the Great Depression.

What happened to money supply during the Great Depression?

119 posted on 12/09/2005 10:40:37 PM PST by Toddsterpatriot (The Federal Reserve did not kill JFK. Greenspan was not on the grassy knoll.)
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To: Toddsterpatriot
When every price declines, that's deflation.

Every price? Not the average price level for the hypothetical average Joe? If Picassos appreciate while all commodities depreciate is that deflation?

If home values and the stock market decline while hard asset prices rise is that deflation?

142 posted on 12/11/2005 7:40:33 PM PST by AdamSelene235 (Truth has become so rare and precious she is always attended to by a bodyguard of lies.)
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