content: It's kind of damned if you do, damned if you don't. It seems like deflation would be a good thing. Our money would increase in value and the price of things would stay roughly the same or even go down. Awesome! But there's actually a lot of sound logic behind the Fed, and every single country in the world, constantly seeking inflation. The reason is that in deflation you're thinking about yourself, but you're not thinking about the big picture view. In the big picture view the richest people can now earn guaranteed, and vast, sums of money by literally doing nothing. If you have a billion dollars, and hide it under your bed - a 1% deflation rate means you just earned $10 million dollars. The problem then becomes that the extremely wealthy lose a major motivation to invest in anything other than a complete and sure fire opportunity. It incentivizes incredibly risk averse, or no, investing. Less money moving about now only means less development, but it also means the currency begins to deflate even more. And while you think about yourself having a bit more money, you're not thinking about the fact that your boss is now paying out even more money to maintain his employees while his real revenue is decreasing! Investments slow and your wages don't stay the same - they also begin to decline. Along with decreased wages you also see increased lay offs as company's simply no longer have the revenue to maintain their size. Debts also increase in real cost which has an enormous impact as well. The natural culmination of deflation is a depression. Moving off the gold standard wasn't just a path out of the great depression, but an attempt to deter future depressions. Inflation by contrast does about the opposite of everything above. It seems to suck from a 'commoner' point of view since things just keep getting more and more expensive and whatever meager amount of money you can save up becomes worth less and less each year - but in the big picture view it keeps an economy functioning. Especially in today's society where the top 0.1% now have as much wealth as the bottom 90% a deflationary system would destroy the economy. That's why banks are freaking out and pumping out the funny money like there's no tomorrow. So for instance central banks looking at negative interest rates doesn't mean you have a negative interest rate on your account balance. That negative interest rate is the rate that the central bank charges other banks to borrow. In other words the central bank is willing to literally pay banks to borrow money from them to lend to people just to try to keep the economy grinding along. Perhaps an interesting experiment would be to go from the bottom up. Instead of injecting money into the top of the population, inject it into the bottom. The last near 4 decades have proven pretty much beyond a shadow of a doubt that supply side economics just doesn't really work, even if the logic behind it seemed compelling. So let's try the more intuitive direction.