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<p>[QUOTE=&quot;gboulton, post: 1285585, member: 27043&quot;]Everything you say here makes sense, except for your use of the word &quot;deflation&quot;.&nbsp; I believe you mean &quot;inflation&quot;.</p><p><br /></p><p><br /></p><p><br /></p><p>Exactly.&nbsp; You&#039;ve just given an excellent analogy for <b>IN</b>flation.</p><p><br /></p><p>Inflation, which you are describing, is the RISE in prices, due to the FALL of the purchasing power of the currency, which can certainly result from the introduction of excess money.</p><p><br /></p><p>The result of inflation is, typically, the need to print larger and larger currency notes.&nbsp; See : Zimbabwe $100,000,000,000,000 note.</p><p><br /></p><p>Deflation, which is the word you&#039;re using incorrectly, is a fall in prices due to the INCREASED value of the currency.</p><p><br /></p><p><br /></p><p><br /></p><p>I believe you&#039;re absolutely correct here.&nbsp; </p><p><br /></p><p>[/quote]</p><p>So, if making larger denomination bills &quot;just for the convience&quot; is going to put any more dollars in the world, I&#039;d do and say what ever I could to try and put a stop to that.[/QUOTE]</p><p><br /></p><p>Your premise is again flawed, for three reasons this time.</p><p><br /></p><p>1) Inflation is not inherently bad.&nbsp; Excess inflation is, but inflation in and of itself is not evil.</p><p><br /></p><p>2) You presume the introduction of a $200 bill increases the money supply.&nbsp; While that&#039;s POSSIBLE, it&#039;s not a given.&nbsp; The government COULD simply print fewer $100&#039;s to compensate.&nbsp; Thus, to &quot;do and say what ever [you] could&quot; to stop it would be hasty and over-reactionary until you understood the overall money supply.</p><p><br /></p><p>3) You&#039;re ascribing to the fixed pie description of money and economics...which simply isn&#039;t right.</p><p><br /></p><p>Your analogy to gold breaks down (as does a gold standard, for the same reason) at this point.&nbsp; There is, as you rightfully assert, a fixed amount of gold available at any given time.&nbsp; If large quantities were added or reduced, the price of gold would move sharply, since the total amount of available gold had changed.</p><p><br /></p><p>Money, however, is a store of value.&nbsp; There is no &quot;fixed&quot; amount of value in the world.&nbsp; Value can be...and is...created whenever a good is produced, for example.</p><p><br /></p><p>This is, indeed, the single biggest argument AGAINST a return to the gold standard.</p><p><br /></p><p>I know, I know, my Libertarian brothers will hate me for saying that.&nbsp; *lol*[/QUOTE]</p><p><br /></p>

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