> It's volatile because deflationary currencies are inherently volatile.
That is wrong. Maybe you mean 'fixed supply currency'.
There is nothing inherent in deflation, defined as 'general decline in general price level' that makes it volatile in terms of purchasing power.
The old pre-WW1 gold standard was deflationary, but it was also as stable as any system humans have ever come up with. It worked by banks adjusting reserves depending demand for their base currency.
That is wrong. Maybe you mean 'fixed supply currency'.
There is nothing inherent in deflation, defined as 'general decline in general price level' that makes it volatile in terms of purchasing power.
The old pre-WW1 gold standard was deflationary, but it was also as stable as any system humans have ever come up with. It worked by banks adjusting reserves depending demand for their base currency.