Breaking the Myth:
For decades, economists have warned us about the dangers of deflation. The argument goes that as prices fall, consumers delay purchases, businesses suffer, jobs are lost, and economies spiral into recession. This fear drives governments and central banks to print more money, ensuring that inflation stays positive. But what if this widely accepted narrative is fundamentally flawed? And more importantly, what if Bitcoin’s deflationary model turns this concept on its head?
The Fear of Deflation in Fiat Systems
In traditional fiat economies, inflation is seen as a necessary evil. A small amount of inflation (typically 2-3%) is considered ideal to encourage spending and borrowing. Conversely, deflation – when prices drop over time – is painted as a dangerous force. The belief is that when people expect prices to fall, they hoard cash, delaying purchases and crippling economic growth.
This fear isn’t entirely unfounded. In the Great Depression, falling prices exacerbated eco…
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