Reply To A Poster On Steve Keen’s Patreon Page 11/21/2017

AH:  You can’t really have a deflationary currency for any sustained period of time. The raison d’être of currency is to provide a stable standard of value in terms of which markets can trade. People require something to be able to set prices in. They need a value unit to *think* in terms of. That’s the role that currency serves. If your currency is deflationary, it behaves less like a currency and people will look for other more stable assets to use as currencies instead. So while it might be interesting to think about what would happen if we had a deflationary currency, that’s like asking what would happen if we went faster than the speed of light. If it’s deflationary, it’s not a currency anymore.

Me:  My Reciprocal Discount policy at the point of sale within and throughout the entire economic process refutes the necessity you point to….because it is reciprocal. In other words it is a beneficial policy for both the individual and enterprise, to the individual increasing their purchasing power by 40-50% and to the enterprise because it allows them to sell at 40-50% below their best competitive price….and yet because their discounts are reciprocally rebated back to them….they can be whole on their overheads and profit margins.

Costs, eventual/actual prices and the full monies to liquidate them are equated and accounted for so the currency is stable but prices to the consumer (both individual and commercial) are greatly reduced by the discount. The reciprocality of the rebate distributed back to the enterprise initially giving/gifting the discount is the very real “trick” that enables the benefits to all.



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