How to fight deflation
It is said that money value results from the quantity of money that are chasing the products. It is actually the opposite: money value depends on the rate of products chasing money. It sounds similar, but it is not the same. Let's take it slowly. The value of the money depends on the products that can be bought with a monetary unit. That value depends on the product price. The seller will always try to maximize its profit, so we will try to sell each product with the highest possible price. Higher price is an inflationary pression: one unit of money will buy less products. What opposes to the inflationary pression from the sellers? One limitation is the share of wallet that the consumer affords to allocate for that product. If a product is too expensive, potential customer might delay of give up buying that product. This creates a problem for the producer. But let's see closer why. The pressure for the producer to sell cheaper - in order to sell something - comes from its debt....