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> it's literally defined as a decrease in prices, which is caused by a lack of demand. Correlation ≠ causation. In particular when practically every occurrenc

> it's literally defined as a decrease in prices, which is caused by a lack of demand. Correlation ≠ causation. In particular when practically every occurrence of deflation + a bad economy followed a crash in an economy built on debt. Have you considered that just like withdrawal symptoms, it isn't necessarily deflation that's the bad thing? If you have government contracts and buy assets using effectively subsidized money, your assets and value both grow in absolute numbers. You're buying with fresh money before it has been matched by a price signal in the economy, only then raising the price. With deflation only value grows, and only for as long as the economy stays alive. How does printed money enter the economy if it isn't used to buy anything? And the printers don't buy from everybody equally. Value is shifted from the entire society to those closest to the printers. And people not in a position to chose between loans or take any loans at all? I.e. below middle class?

Mikeb85 11y ago
> In particular when practically every occurrence of deflation + a bad economy followed a crash in an economy built on debt. Have you considered that just like withdrawal symptoms, it isn't necessarily deflation that's the bad thing? A decrease in prices spurs demand so it can be a good thing. However, in the context of currency, you don't want the currency itself to have deflationary mechanisms. In bitcoin's case, there's an ever-increasing cost to mining the bitcoins. This means the value will naturally increase. Which discourages any sort of spending. The reason why a money supply that never increases is bad, is because human populations do increase. If more humans demand the same quantity of money, then those with money have the incentive to never spend. This negatively impacts the economy. This is why in any downturn, the central bank response to deflation is to increase the money supply. By making money cheaper, they're encouraging people to take advantage of cheaper asset prices. This in turn, spurs demand. > If you have government contracts and buy assets using effectively subsidized money, your assets and value both grow in absolute numbers. You're forgetting that the borrower owes money. > How does printed money enter the economy if it isn't used to buy anything? Of course it's used to buy things. No one takes out loans to simply hoard money, because there's a cost to the loan (and the cost of the loan will always be more than the cost of a no-risk asset). > Value is shifted from the entire society to those closest to the printers. This is conspiracy thinking at it's finest. No one gets 'free' money. It all has to be paid back at some point. Value goes to those who engage in constructive activities. Loans are a way to shift unused capital to constructive activities. And no, no one has to take out a loan. You can accrue capital in other ways. However the lending system makes the whole economy more efficient.
- EdHominem 11y ago
  > This is why in any downturn, the central bank response to deflation is to increase the money supply. By making money cheaper, they're encouraging people to take advantage of cheaper asset prices. This in turn, spurs demand. This ignores the astronomical losses from our fractional banking system. Pretty much every 40 years we get a crash and print our way out of it, giving ever more money to the core of the system. (Trickle-down, or too-big-to-fail, both were rewards simply for being the entrenched players.) The USD has lost 95% of its value. Perhaps for the "economy" (... of bankers who defraud us) inflation is good, but for the common man fraud is worse and fiat is the enabler, not the solution. Sure, there's a problem having a fiat system is good for but there's a huge gulf between "Fixes problem X" and "Performs better across all scenarios".
  - Mikeb85 11y ago
    > This ignores the astronomical losses from our fractional banking system. Pretty much every 40 years we get a crash and print our way out of it, giving ever more money to the core of the system. Take a look at some very long term (100 year) GDP charts. The economy is far less volatile today than ever before. While there are culprits, the fractional banking system isn't necessarily one. > Trickle-down, or too-big-to-fail, both were rewards simply for being the entrenched players. These are the results of a corrupt system, not because of the existence of fiat currency or central banks. > The USD has lost 95% of its value. And you make 20 times more of it. > Perhaps for the "economy" (... of bankers who defraud us) inflation is good, but for the common man fraud is worse and fiat is the enabler, not the solution. Please, there was theft and fraud when we were trading piles of grain and goats.
    - EdHominem 11y ago
      > These are the results of a corrupt system, not because of the existence of fiat currency or central banks. Without the ability to print money we wouldn't have to wish for a unicorn - a non-corrupt system. The banking/mortgage problem in 2008 only happened because everyone involved knew we'd bail them out, because we could. Whereas if we couldn't we'd have recovered the lost funds from the guilty parties. The existence of an easy out practically guarantees that the government will take it. > And you make 20 times more of it. And what you had from before is nearly worthless. Yes, inflation keeps people on their toes because they need to work today to eat today, but I'd keep you on your toes if I stole your car too, you'd have to really be productive to break even! That's a broken window fallacy with the twist of slightly breaking everyone's window. As a currency, fiat is an absolutely stupid idea. So stupid that they had to make specie ownership illegal to force people to play along. Yes, I understand it gives the country great options. But so does conscription... > Please, there was theft and fraud when we were trading piles of grain and goats. Only fiat inflation lets a thief steal from everyone simultaneously. And thanks, but that's not really an answer anyways. I don't care that someone is always willing to steal from me, I care when the law says I can't attempt to avoid it.

Mikeb85 11y ago

> In particular when practically every occurrence of deflation + a bad economy followed a crash in an economy built on debt. Have you considered that just like withdrawal symptoms, it isn't necessarily deflation that's the bad thing? A decrease in prices spurs demand so it can be a good thing. However, in the context of currency, you don't want the currency itself to have deflationary mechanisms. In bitcoin's case, there's an ever-increasing cost to mining the bitcoins. This means the value will naturally increase. Which discourages any sort of spending. The reason why a money supply that never increases is bad, is because human populations do increase. If more humans demand the same quantity of money, then those with money have the incentive to never spend. This negatively impacts the economy. This is why in any downturn, the central bank response to deflation is to increase the money supply. By making money cheaper, they're encouraging people to take advantage of cheaper asset prices. This in turn, spurs demand. > If you have government contracts and buy assets using effectively subsidized money, your assets and value both grow in absolute numbers. You're forgetting that the borrower owes money. > How does printed money enter the economy if it isn't used to buy anything? Of course it's used to buy things. No one takes out loans to simply hoard money, because there's a cost to the loan (and the cost of the loan will always be more than the cost of a no-risk asset). > Value is shifted from the entire society to those closest to the printers. This is conspiracy thinking at it's finest. No one gets 'free' money. It all has to be paid back at some point. Value goes to those who engage in constructive activities. Loans are a way to shift unused capital to constructive activities. And no, no one has to take out a loan. You can accrue capital in other ways. However the lending system makes the whole economy more efficient.

EdHominem 11y ago
> This is why in any downturn, the central bank response to deflation is to increase the money supply. By making money cheaper, they're encouraging people to take advantage of cheaper asset prices. This in turn, spurs demand. This ignores the astronomical losses from our fractional banking system. Pretty much every 40 years we get a crash and print our way out of it, giving ever more money to the core of the system. (Trickle-down, or too-big-to-fail, both were rewards simply for being the entrenched players.) The USD has lost 95% of its value. Perhaps for the "economy" (... of bankers who defraud us) inflation is good, but for the common man fraud is worse and fiat is the enabler, not the solution. Sure, there's a problem having a fiat system is good for but there's a huge gulf between "Fixes problem X" and "Performs better across all scenarios".
- Mikeb85 11y ago
  > This ignores the astronomical losses from our fractional banking system. Pretty much every 40 years we get a crash and print our way out of it, giving ever more money to the core of the system. Take a look at some very long term (100 year) GDP charts. The economy is far less volatile today than ever before. While there are culprits, the fractional banking system isn't necessarily one. > Trickle-down, or too-big-to-fail, both were rewards simply for being the entrenched players. These are the results of a corrupt system, not because of the existence of fiat currency or central banks. > The USD has lost 95% of its value. And you make 20 times more of it. > Perhaps for the "economy" (... of bankers who defraud us) inflation is good, but for the common man fraud is worse and fiat is the enabler, not the solution. Please, there was theft and fraud when we were trading piles of grain and goats.
  - EdHominem 11y ago
    > These are the results of a corrupt system, not because of the existence of fiat currency or central banks. Without the ability to print money we wouldn't have to wish for a unicorn - a non-corrupt system. The banking/mortgage problem in 2008 only happened because everyone involved knew we'd bail them out, because we could. Whereas if we couldn't we'd have recovered the lost funds from the guilty parties. The existence of an easy out practically guarantees that the government will take it. > And you make 20 times more of it. And what you had from before is nearly worthless. Yes, inflation keeps people on their toes because they need to work today to eat today, but I'd keep you on your toes if I stole your car too, you'd have to really be productive to break even! That's a broken window fallacy with the twist of slightly breaking everyone's window. As a currency, fiat is an absolutely stupid idea. So stupid that they had to make specie ownership illegal to force people to play along. Yes, I understand it gives the country great options. But so does conscription... > Please, there was theft and fraud when we were trading piles of grain and goats. Only fiat inflation lets a thief steal from everyone simultaneously. And thanks, but that's not really an answer anyways. I don't care that someone is always willing to steal from me, I care when the law says I can't attempt to avoid it.