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<p>[QUOTE=&quot;InfleXion, post: 1250169, member: 29012&quot;]The definition of inflation is an increase in the monetary supply (in excess to growth of goods and services). Demand exceeding supply just raises the cost of something, which in a fair system would cause the relative cost of other less desirable items to share the load for the drop in price to keep things balanced. The scenario you&#039;ve described that requires inflation to account for interest is all the more reason why interest is inherently bad for the average person holding money. Having the money supply not grow, and thus deflation increases buying power and is good for the vast majority of people. You don&#039;t need to have more money in existence for one item to have more value than another. The value is a fraction of the total monetary supply based on worth, so if for example we could have dollars denominated in decimals we could feasibly have only one dollar in circulation and still function just fine. I agree that we will see $5 silver again at some point, but I do not see this happening until today&#039;s currencies are replaced by something else. If $500 of today&#039;s dollars becomes $5 of the new dollars, then $5 silver is still a lot of value. It&#039;s all relative, but I don&#039;t see how silver denominated in 2011 dollars could ever be $5. That would require a significant decrease in monetary supply which can&#039;t even begin to happen until the outstanding debt is paid off.[/QUOTE]</p><p><br /></p>

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