Bitcoin Forum
June 21, 2018, 10:47:46 AM *
News: Latest stable version of Bitcoin Core: 0.16.1  [Torrent]. (New!)
   Home   Help Search Donate Login Register  
Pages: [1]
Author Topic: Ideas on what a deflationary economy encourages  (Read 759 times)
Full Member
Offline Offline

Activity: 133
Merit: 100

View Profile
June 19, 2011, 04:58:09 PM

A steady deflationary economy encourages a few things. Please critique if this seems wrong.

  • Due to the presence of the currency as an ever appreciating asset, most financial assets lose their sheen for all except the investors with a LOT of wealth
  • As a corollary to the above, dividends become very important to firms. Most people would not tolerate firms not paying dividends for a long time
  • The idea of firms as ongoing concerns may reduce if genuinely good opportunities are lacking
  • Firms will keep minimum inventory. They will want to keep more inventory as raw material than as finished goods. JIT like processes will get a boost
  • Products might be designed for long term usage or high recyclability, since the purchase of most items will be compared with the currency which is constantly appreciating
  • Wealth concentration may increase. But the free ride that bankers have may not exist in a bitcoin world
  • More percentages of workers salary will be paid as proportion of company sales as defaltion makes it difficult for entrepreneurs to directly cut salaries
  • Consumption patterns will change slower compared to today. Fewer arbitrary fashion changes would occur
Pages: [1]
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!