I had the good fortune to attend the Berkshire Hathaway annual shareholders' meeting this weekend. (They're the fourth largest company in the U.S.A.). The chairman and CEO of the company, Warren Buffet, spoke of the speculative nature of Bitcoin.
Currency traders exist today, but most currencies that are traded are relatively stable, and these traders prosper by generating small profits with slight variances in relative currency value over a long period of time. Conversely, think about a highly speculative currency like Bitcoin: The amount of dollars you paid for that Bitcoin would have purchased a certain number of goods and services yesterday, and would probably purchase [relatively] the same amount of goods and services today. There is no such certainty with the Bitcoin itself (yet). At least, until it stabilizes and stops being so volatile.
Now, this isn't exactly related to the problems of deflation, but it does show the heart of the problem is similar: When a currency cannot effectively represent the value of an item, good faith is lost.
Back to PSO:
Right now, there are so many items that are valued at "less than one PD" that the PD is failing to represent a great deal of transactions accurately. Players have thus resorted to busting down PDs into (X number of HP mats, Meseta, etc.) to account for fractions of PDs.
This would be similar to eliminating all denominations that are below $1. There's a huge range of items that exist from $0.01 to $0.99 that would all be leveled at the same price, and we would be forced to use pieces of gum, pencils / pens, and other various knickknacks when trying to represent something less than a dollar; a very non-ideal and cumbersome situation.
I realize we'll never be able to completely level off this problem with PDs, but increasing the PD rate would widen the range of item values in the "0 to 1 PD" range. Perhaps a 0.5 PD item now would be a 1 PD item in the future, which opens up a lot more trade opportunity without someone feeling like they "lose" the transaction.
(This is more of an addendum to my main argument. I'm always thinking, learning, and listening about finance. Maybe this will help. I don't know.)
I haven't heard much feedback from the server Admins on this revived thread. Any thoughts? (On everything, not just this post.) Thanks.