[__john]

> why it's important for a currency to be inflationary

Money is created when people take out loans right? (like for a home or car, or when a buisness takes out a loan for capex)

So if the population contracts (i.e. the boomers start dying) doesn't that mean there should a contraction of money supply since fewer people will exist to take out loans?

[sp527]

I think what you're asking is whether money can be destroyed and the answer is yes. For example, if the Fed allows debt instruments it holds to be paid down. What matters, of course, is the relative rate of money creation vs money destruction.