“With a fixed money stock, as under bitcoin, it might have been. For example, if an interest rate in the absence of price inflation or price deflation was 2% and price deflation under bitcoin was 6%, then there would be no loans. Lenders would hold money instead of lending it at a -4% rate of interest.”
Another question, actually. If this were the case, wouldn’t the supply of credit fall and cause the interest rate to be positive again? Or would the holding of money cause prices to fall too fast?
Also, Rothbard has stated that there is no need for a larger money supply, that any will do. What did he mean by this?