I know practically nothing about economics, but I think Jerome might have you on this one volatile. Are you sure you aren't talking about currency devaluation?
Like I said...clueless about economics I am. Can someone clear this up?
As I actually said later on in that thread, I was indeed talking about deflation
and devaluation at the same time, in error. I admitted my mistake then, and I'll happily admit it now. How it's relevant to Jerome's buffoonery, I have no idea.
Just to clarify - a scarcity of hard currency reserves under a gold standard, the subject of that part of that thread, causes deflation
followed by devaluation to keep up through its very nature. I was wrong, but only in not elaborating on my point clearly enough. That's a matter for that thread, though, and has no bearing on this one.
Note that JdG has to poison the well rather than actually address the points made or concede his error. Par for the course, really.
ETA: To fully clarify - in a gold-backed economy, as gold becomes scarcer, the purchasing power of your dollar increases in line with simple supply and demand economics. This is
deflation, which whilst it increases the purchasing power of cash, decreases the value of illiquid assets such as property and discourages capital investment. As gold becomes scarcer still, and the government needs more cash to cope with, say, a growing population, it
devalues the currency, meaning that everyone's holdings reduce in value. Both of these things are Bad Things.
