I'm trying to wrap my head around the implications of a deflationary monetary regime. In a world where bitcoin is the only currency, the nominal cost of every good should go down since the supply of bitcoin is essentially constant (after the next halving the bitcoin inflation rate will roughly equal world population growth rate, and it's all downhill from there). So, if I own bitcoin, why would I ever lend it out? Even without charging interest as compensation for default risk, a borrower would have a difficult time paying back the debt. With interest, credit markets at any meaningful scale seem impossible given that the currency supply is a zero sum game. Maybe I would be willing to part with some of my coin in return for equity in a very promising business but why would I ever fund something like a mortgage? Or even a mom-and-pop coffee shop for that matter.
I feel like I'm missing something simple and obvious here...
Assumptions
Credit and lending