But I thought you said "Inflation is an increase in the money supply and deflation is a decrease"? Why would the market want to bring inflation?
Why would it affect them one way or another if their suppliers lowered prices 3%. You are confusing profit margin with overall price.
So GM would have to reduce salaries every year? And their suppliers too?
Why? It's only a relative value. Replacement costs would drop, all goods are dropping.
So You buy a $300,000 house and the price drops 3% each year and you don't think that would cause a problem?
M1 dropped by 27%.
Was that good or bad?