Contrary to popular belief, deflation is good. Inflation benefits those with capital producing assets. For workers, inflation forces them to continuously fight for the same wage they had a year ago.
In a deflationary environment, one need only hold currency or inert commodities in order to have greater future purchasing power.
In an inflationary environment, it is everyone, holders-of-capital included, who must continuously work to preserve purchasing power.
Inflation encourages malinvestment. There's always a motivation to invest and earn money from selecting profitable ventures. Inflation forces people to be less selective.
> In a deflationary environment, one need only hold currency or inert commodities in order to have greater future purchasing power.
This is only true if you ignore taxation. The government is perfectly free to tax people's wealth if they feel hoarding has become problematic.
>In an inflationary environment, it is everyone, holders-of-capital included, who must continuously work to preserve purchasing power.
Nonsense. People with money always find a way to escape inflation. Take a look at real estate.
Carry this thought experiment a few steps further. What will people buy every day, despite this currency appreciation effect?
I think you meant to say significant deflation is bad. But so is significant inflation. Deflation is actual good in many ways -- worker's wages are worth more, their savings are worth more, and consumption is reduced (whereas inflation can encourage wasteful consumption).
The US is in desperate need of deflation today. Productivity has decoupled from wages -- deflation would make those wages worth more to narrow the gap. Houses have become unaffordable -- impossible to even save a down payment -- deflation will make young people's savings valuable enough to afford that down payment.
Inflation is the snake oil sold to us to benefit the elite at the expense of everyone else.