Yes, gold would be mined every year. Do you think the gold supply will expand by 4% next year?
Besides, economic necessities have always trumped unions. Either that or the company goes under.
Yes, if a company can't cut costs quickly enough, they will go under. Do you think any new business will start up and borrow money under conditions of deflation? How did Japan thrive under deflation these last 15 years?
But replacement costs have gone down, so he is none the worse for wear.
Yes, replacement costs have gone down. He put $60,000 down on his original purchase and after 10 years he paid down $45,000 of the $240,000 mortgage. If the house is worth $221,000 he clears $26,000 before broker fees. Not very much for 10 years of payments. 5% broker fees brings his cash down to $15,000.
He should be able to put that down on a new $75,000 house. None the worse for wear?
The incentive for saving is certainly higher under an appreciating currency than a depreciating one
Yes, there is an economy slowing incentive under deflation.
But a gradual market based strengthening of a currency can be a benefit. It leads to high savings rates and high savings is the lifeblood of capital investment.
Capital investment is not very desirable in a deflationary environment.