[bcoates]

The "computers make the dollar deflationary" argument is terrible.

Deflation is bad because it shifts investment into savings.

Computers are mostly immune to this effect because until a company has enough computer equipment, it's one of the highest ROI things they can spend funds on, and once the need is filled, there is very little additional benefit from buying more. This gigantic cliff in the demand curve overwhelms any marginal benefit to altering the number of computers you buy.

Most of the targets of investment are not like that, and you see a small return on incremental investment after accounting for things like risk. Deflation makes these productive investments impractical because they lose out to just holding the currency.