Here is a simple Schema that show how in a limited supply economy can exist inflation and deflation at same time, without the need of introduce or burn money supply. The key is the rich money control.
Hope you enjoy.
Link to schema: http://s9.postimg.org/i1gbkpt4v/SCN_0001.jpg
Hope you enjoy.
Link to schema: http://s9.postimg.org/i1gbkpt4v/SCN_0001.jpg
Questions about your schema:
At point 2 why rich don't spend? Why don't invest? To wait the deflation? If yes how live them without spending? How can make them the life of the rich without spending BIG quantity of money. A rich cannot stay without doing its luxurious life and spend big amounts of money. Since in this point your schema appears doubtful.
At point 7 you tell the rich get their ROI from their investment. So get more than had. Otherwise have no meaning to do investments. The amount of money in circulation is the same. So their ROI is given from the money of the poor. This is the only possible source. But in this way after two or three cycle of deflation all the poor will be dead because will have not more money. Would be taken all from the rich.
Conclusion: this example is only a sophism and not possible to be never verified.
Dont' spend mean them spend less. Do you know dumping?
However, my dear man, it is a simple schema. But is what happen today.
If I tell don't spend that, for me, mean don't spend and not spend less. Spend less is spend less. This is the meaning of the words used for everyone who name himself as a normal person. You who mean different meanings of the normal words used by everyone, must accompany your posts and schemes with a dictionary where you must explain your meaning of the words you use in order that to not be misinterpreted or even understood.
And if this your schema (as you write in your last sentence) happen today your schema is again more than out of reality. Because today the amount of money in the economy (every economy) increased with the increase and the development of the economy in the given country. Your schema treat a totally different situation. Treat the case when the amount of money in circulation is fixed and don't change. So both cases are essentially different.
As for the deflation in today's economies I haven't heard deflationary cases in economies since today or, to be honest, maybe I have heard some case but I am not sure. And if happen, is happen only one time in one country. Not to many times as it is supposed in your schema. Anyhow I am not to much informed about this, so I'm waiting your real examples.
