[thornkin]

Why couldn't loans be made which devalue at a rate pegged to a basket of goods? We track the rate of inflation today, we could just as easily track deflation and loans could be pegged to that. Doesn't that solve the loan problem?

[mpyne]

The way I see it, that's simply shifting the problem around. Before your loan was based in BTC, now it's based in (essentially) "Number of equivalent baskets of goods".

I don't think lenders would appreciate the volatility inherent in their loaned-out money having value fixed to the amount of crop yield the farmers can deliver this year, or the amount of oil extracted, etc. Similar logic would apply for those trying to get a loan.