@dantheman Nice ideas. I mostly agree with your ideas about the positives of deflation vs. inflation but I think that in a deflationary environment people tend to become aggressive because they feel they have less money than the others. In addition, there is more risk of more centralization of money. In a deflationary environment money supply is shrinking so if a few people have most of the money supply then the rest will want to overpower those people more. Therefore we risk to have even wars if such an environment persists. Bitcoin will never become a world currency due to its limited money supply and deflationary nature. Few people would own a lot of purchasing power at the expense of the majority.

On the other hand in an inflationary environment when money is printed all the time (money inflation), people do not feel poor (even if their purchase power is lower) and therefore wars and rebellions are avoided.

My conclusion is that neither money deflation or money inflation is good or bad. The equilibrium is better. Market always figures out this equilibrium but some times with delays so intervention on the money supply should always be a solution but not a necessity. Everything is not mathematics and economics but also psychology and human behavior which some times may be received as irrational by the majority.