The incentive to hoard, also often called the "deflationary spiral", is a theory proposed by neo-Keynesian economists, which doesn't appear to be as bad as they say.
People have finite lifespan, and so, they want to use their hoards to better these finite lives, which leads them to spend. This preference, known as the "time preference", strikes a balance with the tendency to hoard. It is impossible to predict where this balance is, though, because it's subjective to each participant.
Why do you buy cell phones or laptops today, knowing that future ones will be better or cheaper? Why buy some food today, when you know your purchasing power will be greater next month? Why pay for housing when prices are falling, knowing your contract will be cheaper in five years?
You just demonstrated the concept to which I'm alluding. There is a balance of time preference versus saving preference for absolutely everything in an economy based on the subjective desires of all participants. For some people, this will be cell phones, or cars, or fancy shoes, or little purse dogs. They won't save forever, living just to get by, for some uncertain future when they can have more stuff. There is no deflationary spiral, there's a balance point where it stops.
This dangerous idea has been used to justify all forms of crazy economic intervention since Keynes formalized it. The notion of a currency having to depreciate is a direct consequence of these policies, all based on a fallacy. No matter how counterproductive these policies are, they're still applied. Look to Japan and Switzerland as recent examples. Japan has massive stimulus, the Yen is dropping, are people spending more, no, they're saving for the future, knowing that their savings will be worth less, so they need more of them to get by - no spending on unnecessary items. Switzerland is paying negative interest rates on savings accounts, so people have to save more to offset that.
There are lots of things to dislike about Bitcoin, but its value increasing over time isn't one.
>* Why do you buy cell phones or laptops today, knowing that future ones will be better or cheaper? Why buy some food today, when you know your purchasing power will be greater next month? Why pay for housing when prices are falling, knowing your contract will be cheaper in five years?*
The deflationary spiral is not about consumption of non-durable goods. Thats why all of your examples don't really work as reasoning against this concept. It rather is about investment and consumption of durable goods: Cars, forklifts, the pick and place machines at foxconn.
So, still just the kind of stuff where you get more for your money over time even despite inflation, thanks to technology developments. Why would the impact of messing with the money supply outweigh that of the technology in any other way that forcing a change in scheduling? And how is inflation beneficial for those who need to save money for a long time for large investments?
Inflation would only really make sense in a model where everybody already have access to all the funds they need to purchase what they want, but where they postpone all purchases to see if the can get more, AND where it is these delays that hurt the market by making it hard for the makers of these goods to survive. And this effect has to be the single most dominant one.
People have finite lifespan, and so, they want to use their hoards to better these finite lives, which leads them to spend. This preference, known as the "time preference", strikes a balance with the tendency to hoard. It is impossible to predict where this balance is, though, because it's subjective to each participant.
Why do you buy cell phones or laptops today, knowing that future ones will be better or cheaper? Why buy some food today, when you know your purchasing power will be greater next month? Why pay for housing when prices are falling, knowing your contract will be cheaper in five years?