You just described bitcoin. If ever need be, they could update the blockchain for even more divisiblity. That'll be like a century from now though, considering how divisible it is.

@@generalsalami8875 Yep, that was my point. and that is why bitcoin is so awesome. Well one of the many reasons.

Yes this is it. This is why there have been lack of money throw history(This has nothing to do with a modern currency).

Saving is good. It frees up land, labor, & capital to be used by demanded ventures through sound lending. You deter consumption today for future production, & thereby more consumption. This stupid idea that nobody would spend has no evidence or logic behind it. People need to spend on necessities. Would you not buy a new game just because it's price will go down in the future? What's the point of money if you never spend it? Each person is at a different point in their lives. The old want to spend the savings they've accumulated over the years, while the youth are encouraged to save. There's still a continuous circular flow of the currency. Necessities are prioritized. The elderly who've worked & saved their whole lives have more resources allocated to them. *This is good.* Let's say (for the sake of argument) that nobody ever spent, what do keynesians think that does? It hurts businesses, creates shortages, & they're forced to raise prices to have any chance of surviving. This encourages people to spend. Even if numerical prices fall from liquidations, *real* prices rise (as there's less stuff). Even in the most extreme unrealistic scenario it's self correcting. What's the alternative? Inflation merely encourages people to save in scarce assets. That reduces their supply for actual consumers & producers. People, especially the rich, flip & hold stuff like housing, that otherwise could've been used. Saving in the currency serves a valuable purpose for the whole economy.

Businesses forcast future demand & supply for it. People only save for future spending. Through saving, many unnecessary present oriented ventures are either liquidated or restructured towards future profit. Since rates are lowered from increased savings, & land, labor, & capital are now cheaper, they can better produce for said future. Since there's no tug-of-war over resources between future & present oriented production, longer-term projects can reach their full potential.

- The fact that holding deflationary money is *one* good investment doesn't mean that it's the *best* investment. - Take a look at the industry that is deflationary today - tech. Which mobile do you use? If you'd just held on to your money, you could have bought a better phone in almost the same cost in a few years (this has often been true in the past, don't ask me what will happen in the 8% inflation environment). Just because money is gaining in value doesn't mean people will indefinitely postpone spending that's more valuable to them than the money. - What it will do is discourage senseless consumerism, to some degree: Better to burn my money on nonsense than hold on to it. - When one person saves money, it's loaned out by the bank to another person who may spend or invest it. When invested, it goes towards longer term projects. This is what improves our productivity and helps crate more prosperity in the future.

Cuz 1% of people has 40% of it

@@LIVdaBrand No, it's because people can't get enough of anything

I agree. Waaay too complicated to follow.

Someone would have to save first, then loan you money. That's how things worked until the "modern" era. The rate of interest on the loan would be based on the prevailing rate of interest, factoring in the particular risk that the borrower appears to be to the lender.

@@acem82 suppose i borrow 100 from a bank and promised to pay back 101, wouldn't it be harder for me to pay back 101 with falling prices over time

​@@tonistaak Yes, it would. But, the rate of price inflation/deflation is already factored into the nominal rate of interest. So, if the real rate of interest were 5%, but price inflation is expected to be 2%, the nominal rate of interest would be 7%. It is the same way with price deflation, but in the opposite manner. If price deflation is expected to be 2%, at a rate of interest of 5%, the nominal rate of interest would be 3%. If you now think to yourself that the rate of price inflation is 8% and the rate of interest on a home loan for 30 years is 6%, and that can't possibly work, congratulations, you are correct! The world goes absolutely insane when there's fractional (or zero) reserve banking, and the central bank tries to hold the rate of interest artificially low.

@@tonistaak No because you would simply have to save up money to pay off the loan.

@@tonistaak you must earn that interest, yes. That's good

Deflation isn't necessarily bad

Deflation is great

Technically speaking, there are 2 types of inflation and deflation. 1. Price inflation/deflation, a change in the price of a product. 2. Monetary inflation/deflation, a change in the amount of money in the economy. In the case of Misesium, there is no change in the money supply, so you are (apparently) speaking of price deflation. So, my response is to ask another question, what is bad about price deflation? Every unit of money can now buy more goods. How is that bad? Any amount of time that the money unit isn't spent it becomes more valuable. That's a good thing! The reason why "economists" (not worth the name) complain about price deflation is because: 1. They think that people will immediately spend more if their money unit is losing value (which is sort of true). 2. They recognized that price deflation correlated to "busts" in the economy. Point 1 is true, in that people don't hold money that is losing value. The reason they think spending is good is because spending is their "god". They have no concept that it's saving that allows the accumulation of wealth, not spending. Point 2 is simply correlation, not causation. Price deflation doesn't cause economic downturns, it's the mechanism by which the economic downturn is dealt with by those living through it and what causes the downturn to cease! If you still think price deflation is bad, ask yourself this, if you had to choose between 2 mediums of exchange, one has 100% price inflation per year, or the other that has 100% price deflation per year, which one would you choose? -An Economist

The market regulates itself...

@@neonschaf indeed

Oh yeah fair point, banks also help allocate resources to profitable ventures by giving bank loans while they create more money/credit. That function can't be played by fixed money supply if I understood it correct

@@ajinkyapathare isn't this why we have financial crisis in the first place? Banks are getting too powerful

@@Omer1996E.C IDK bro I'm still learning & trying to understand

Joan you are incorrect. Sound money is the only way

1. One of Say's Laws can be summed up as "nothing can be consumed until it's produced". That is to say, thinking that debt explains exchanges of goods puts the cart before the horse. 2. Rather than a theory about money, why not study where money actually comes from. Wouldn't that be more helpful? So here's a video on that: kzfaq.info/get/bejne/qciZabiLttOuhZc.html

So who will get the privilege of spending the newly minted currency units? You? Your friends? Your friends in the government mafia? There will always be inflationary theft from the poor with the mindset that you have put forward.

Bitcoin is not (yet) money, which is to say it isn't the commonly accepted medium of exchange. It isn't (yet) widely held. It is still in its infancy as a medium of exchange. People still aren't sure about it and governments haven't yet decided how hard they are going to make it for people to use it. That's why there are wild swings in its purchasing power.

Bitcoin is not a currency right now, it is a stock. That is why it behaves like a stock and not a currency.

@@MegaLokopo Then why are they called "cryptocurrencies"? What does the stock own and what dividends does it bring? You see, when you actually analyze things, you get to the truth.

@@acem82 The name of something does not determine what it is. Most stocks are meaningless in "what they own" unless you have almost all of them. Besides the name what makes it a currency? What percentage of the people who own a portion of it, actually use it as a currency. You see, when you actually analyze things, you get to the truth. You can't judge a book by its title.