Re: Explain to an idiot the benefits of going back to the Gold standar
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If the future value of money becomes *greater* than the present value of money, why would you ever make a loan - especially at a low interest rate - when you could hang onto the cash instead? Even if you were willing to make that loan, what kind of sucker would it take to accept it?
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Would a deflation rate of 2-5% really be that devastating that people wouldnt take on any loans? The rate of deflation would just be calculated into the interest rate that the debtor is receiving. And since all other prices are dropping you have more money to spend maintaining your debt.
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