You've actually answered my baker question, and answered it…

You've actually answered my baker question, and answered it well, "he spends." Good. But look what you said next, because it undoes it: "some people would HODL."
That's the whole problem in one breath. The baker can be the most willing spender in town. But if the people who'd buy his bread are holding their coins, waiting for $15 to become $17, then his spending has no customers. You don't need everyone to hoard to stop commerce. You just need the buyers to. The baker spending doesn't help if no one's spending with him.
And on the haircut, fair point, genuinely. Nobody skips a $15 haircut over a dollar or two. The small stuff, people just buy. But you said "mattresses, holidays" yourself, and that's where it flips. Nobody delays a haircut. People absolutely delay a mattress, a car, a house, if the money in their pocket is climbing. So a money that always rises works for coffees and freezes everything big. That's not a refined economy. That's an economy that can do haircuts and not houses.
One last thing, kindly. The people who'd hoard hardest, you said they're ill and need help. I'd leave that there. Disagreeing with your model doesn't make someone unwell. Holding an appreciating asset is rational, not a sickness, and if rational behaviour breaks the theory, it's the theory worth questioning, not the people.
Build thinkers, not followers.