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Value of each unit of money has been constantly and consistently decreasing

  1. Jun 3, 2003 #1
    Seems like value of each unit of money has been constantly and consistantly decreasing over history in the civilized world, how is this sustainable ?

    EDIT: Damn this post does not belong here but I cant delete it doh!
     
    Last edited by a moderator: Feb 5, 2013
  2. jcsd
  3. Jun 3, 2003 #2
    Money moves faster. And we print more when necessary.
     
  4. Jun 3, 2003 #3

    russ_watters

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    Staff: Mentor

    Its simply a biproduct of economic growth. More goods are available and more people have more money to spend on those goods. So the value of the money will go down.

    As long as its low, its a healthy thing. But DEflation can be very bad.

    Imagine if prices DECREASED constantly. Sounds great, doesn't it? But wait, if prices are going down, why not wait a week or two or three or ten before buying that new car? With deflation the motivation for immediate spending decreases and the economy quickly grinds to a halt.
     
  5. Jun 3, 2003 #4
    But where will it all end, I guess sometime in the future you could pay 1 million pounds just for a loaf of bread :/
     
  6. Jun 3, 2003 #5

    By then, we will probably be using the Euro anyway.

    However, with all this talk of deflation, we could be paying 5pence for a loaf of bread.
     
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