I just want to say...

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Fephisto Posted: Thu, Feb 14 2013 10:31 AM

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Whoever is choosing or making the pictures for the Mises Dailies is and has always been doing a fantastic job.

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Neodoxy replied on Thu, Feb 14 2013 4:27 PM

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I have mixed feelings about today's daily. I feel that most of the points are weak except for #3 which is a very important insight IMO. Just like a depreciation of 3 percent per year of money doesn't affect savings that much, deflation wouldn't do too much either. While I believe that any drastic, and especially any radically unforeseen shift in market data will cause problems, a steady deflation rate shouldn't be too bad, and it would likely shift the production structure further outwards in time.

If deflation occurs as a result of increased efficiency then relative profit margins adjust just fine, if deflation occurs due to an increase in population then demand curves need not shift as such. P may decrease, but Q will likely increase proportionally, helping the adjustment.

Dave helped me to see this here, although there's still more thought I need to put into the matter.