Nah, prices would be even lower since people would stock up on gold instead of things - which drives their prices up.
previously it was like that because gold was x7. People who farm stuff to buy things could farm multiple times more gold in same time as now, these are people that dictate prices on market. It's not these "1m in vault" guys that dictate how much things cost, doesn't matter if you believe this dumbest argument - "these AH manipulators umg".
Another reason is - gold is now tied to coins trough Trade on site. That plays a role too.
Also, if new player can sell his potions for 1k gold, doesn't that make it easier for them?? Now new players most effective way is to do quests(create gold) instead of trading(sink gold) - harder, more time consuming. This logic always confuses me, is it not like this? I feel really dumb as if I don't see something obvious.
Only reason why gold squish exists is to nuke chinese farmers, "healthy economy" is just a smoke screen. How can it be healthy is it destabilizes economy for 8 of the 12 months each year.. ?