[bko]

Yes you may not cash it in today if it's going to be worth more tomorrow but you also wouldn't have the money to use for something else you value.

I don't see how that's different from choosing not to spend $600 for a computer today knowing that it'll be only cost $500 a year from now. You buy it today because it has a higher value to you now rather than a year from now (we still prefer things sooner as opposed to later, despite deflation). You would also may choose to cash in the $600 knowing well that it will be worth more if you wait because you want to spend it on something now.

Even with deflation, people would still spend money as we prefer to consume now rather than later. If cash had a positive return, I'd imagine riskier assets would have an even greater return so you wouldn't necessarily be all tied in cash. I know cash has a negative return (due to inflation) but I still hold it.

[superuser2]

I wrote a longer reply, but the problem is you're looking at this from the side of consumers consuming things they want. I don't give a shit about the resale value of my Macbook Pro, and in 2015 if you're buying a new car you're well aware that you're throwing away the first third of its value in 5 years. Deflation is not a concern when we're talking about people buying things for the joy of owning them.

What we're talking about is investors buying things (like capital equipment) for the purpose of making money. But even for an individual - would you go $200k into debt for a house that's going to be worth $50k in 10 years? Of course not! A rational actor would even shy away from leases - you want to jump to something cheaper (or better for the same price) as frequently as possible, to minimize the amount of time that you're paying above market value for housing. Just like how you want to move between tech jobs relatively frequently to minimize the amount of time you're being paid below market value.