italian economy in deflation (2013/14)

[Impros88]

If you think that inflation is a negative thing, well Italian money (euro) has gained value last year (0,09%). Whether or not this is positive I leave to economists (I think to have read it is negative).

[LiteCoinGuy]

source? and why did you post it here and not in the economy section  ?

[Impros88]

http://www.ansa.it/english/news/general_news/2014/09/12/italian-deflation-confirmed-growth-weak_1bf52a2d-17f1-4ce8-a898-34feb4e3abcc.html

[knight22]

Deflation effets in a debt based economy (fiat) are very different than deflation in a non debt based economy (gold/bitcoin). The first one is bad while the second is good.

[Impros88]

Deflation effets in a debt based economy (fiat) are very different than deflation in a non debt based economy (gold/bitcoin). The first one is bad while the second is good.

explain me better.
On my simple opinion deflection is not caused by debt but crisis. People cannot pay items at actual price so shops have to lower them.

[knight22]

Deflation effets in a debt based economy (fiat) are very different than deflation in a non debt based economy (gold/bitcoin). The first one is bad while the second is good.

explain me better.
On my simple opinion deflection is not caused by debt but crisis. People cannot pay items at actual price so shops have to lower them.

This is true in an economy like gold or bitcoin. In a debt based economy, every dollars represent a debt and has an expiration date. When people or the government stop taking new loans, old ones continue to be paid back which destroy the currency while there is no renewal of loans to create new currency. We have deflation. The money supply shrinks but prices don't lower beyond a certain limit because they are tied to debts that are not deflationary.

Mike Maloney describe pretty well this process in this video
https://www.youtube.com/watch?v=iFDe5kUUyT0

Official sources:

http://www.bankofengland.co.uk/publications/documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf
http://www.rayservers.com/images/ModernMoneyMechanics.pdf
https://www.youtube.com/watch?v=CvRAqR2pAgw