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kevtastic  ·  4349 days ago  ·  link  ·    ·  parent  ·  post: The macroeconomics of Middle Earth

"It is clear from a simple inspection of these two figures that the amount of gold coinage Smaug withdrew from circulation represents a significant volume of currency. This would, inevitably, lead to deflation and depressed economic activity."

Wouldn't the value of each gold coin rise rather than deflate total economic activity?