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Author Topic: Within 2 years, effectively 85% of all bitcoins are mined!  (Read 4622 times)
polynesia
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September 26, 2014, 11:10:13 PM
 #61

Could you give an example of "currency reform" when the peak amount of currency was not exceeded within 6 months? In other words, on January 2015 there is $100 in currency in the economy, then on January 5th, the central banks takes some amount of money out via "currency reform", then there would still be some amount less then $100 in currency through the end of June 2015.

Can you give any real world examples of when central banks wanted to engage in deflation in your terms at all?

Again: I never claimed that central banks *want* to engage in deflation! In fact I said that central banks' policy is almost exclusively inflationary - deflation (abruptly via currency reform) only occurs when the existing currency has been ruined by excessive inflation. So I don't even see a contradiction between our arguments... Wink

So I *don't* claim that central banks stop inflating after a currency reform. An example of a deflationary currency reform is the introduction of the Deutsche Mark after WWII in Germany, when large amounts of  former Reichsmark (previous currency) balances were exchanged at a greatly reduced value ratio  (10:1) for new currency.
I don't think I would consider exchanging one currency for another in this fashion to be a deflation event as per your definition. The total money supply remains constant in this scenario, it is only that smaller numbers are used to measure the amount of money in circulation (similar to a reverse stock split)

Agree with the above statement.
It is just conversion and not deflation.
When the Italians stopped using Lire and started using Euros, denominated prices changed sharply. But that doesn't mean there was deflation.
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