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Yeah, no mention of inflation... no explanation of bearer bonds... I think a big problem of bitcoin is lack of inflation. Terry Pratchett makes the point in M

Yeah, no mention of inflation... no explanation of bearer bonds... I think a big problem of bitcoin is lack of inflation. Terry Pratchett makes the point in Making Money that lack of inflation is stagnating. You tie the entire society to the willingness of people with old money to spend it. Why would we want that?

clarkmoody 11y ago
Of course people with old money are willing to lend it for a fee.
- msellout 11y ago
  Lending does not necessarily encourage spending. During the housing price collapse crisis, the US government lent money to banks at a cheap rate, expecting to spur more consumer lending. Instead the banks just kept the money under the mattress, so to speak.
  - clarkmoody 11y ago
    > Lending does not necessarily encourage spending. And we're back to the old spending vs saving & investment view of economic growth. I'm squarely in the Austrian camp on this, so I don't really care about spending, especially if it's fueled by government intervention to "spur aggregate demand". I disagree that you have to have inflation, especially when we talking about gold & bitcoin. The past 100 years of economics has been tuned to a fiat money + fractional reserve banking + debt + inflation paradigm. Considering bitcoin within this framework doesn't even make sense, as it will (probably) not be the currency of a whole economy. Also, there is more to the story concerning the Fed's balance sheet [1] and the link to inflation. [1] file:///C:/Users/Clark/Downloads/market-outlook-2014-03-why-the-feds-4-trillion-balance-sheet-isnt-creating-inflation.pdf
    - x1798DE 11y ago
      FYI that is a local link that will only work on your computer...
      - clarkmoody 11y ago
        Hahah, wow. Sorry about that. It auto-downloads the pdf, so the best I can do is a search result link. https://duckduckgo.com/l/?kh=-1&uddg=https%3A%2F%2Fwww.ubs.com%2Fus%2Fen%2Fwealth%2Fresearch%2FCIO-WMR-Research-Archives%2F_jcr_content%2Fpar%2Faccordionbox%2Flinklist_0%2Flink_33.1734866907.file%2FbGluay9wYXRoPS9jb250ZW50L2RhbS9XZWFsdGhNYW5hZ2VtZW50QW1lcmljYXMvZG9jdW1lbnRzL21hcmtldC1vdXRsb29rLTIwMTQtMDMtd2h5LXRoZS1mZWRzLTQtdHJpbGxpb24tYmFsYW5jZS1zaGVldC1pc250LWNyZWF0aW5nLWluZmxhdGlvbi5wZGY%3D%2Fmarket-outlook-2014-03-why-the-feds-4-trillion-balance-sheet-isnt-creating-inflation.pdf https://duckduckgo.com/l/?kh=-1&uddg=https%3A%2F%2Fwww.ubs.c...
gozur88 11y ago
Lack of inflation is a problem for governments, since it's a form of stealth taxation. I don't see any historical evidence it's stagnating - at least in the US the periods of highest growth weren't accompanied by inflation. Let me ask you this - as a user of currency, why would you want to use a currency that's worth less when you spend it than it was when you acquired it?
Terr_ 11y ago
Ideally you have neither, and the currency supply scales up (or down) with the amount of stuff in the economy. But if you must choose, it's better to err on the side of inflation because it keeps currency being used rather than hoarded as just-another-commodity.
Bombthecat 11y ago
The rich want that.

clarkmoody 11y ago

Of course people with old money are willing to lend it for a fee.

msellout 11y ago
Lending does not necessarily encourage spending. During the housing price collapse crisis, the US government lent money to banks at a cheap rate, expecting to spur more consumer lending. Instead the banks just kept the money under the mattress, so to speak.
- clarkmoody 11y ago
  > Lending does not necessarily encourage spending. And we're back to the old spending vs saving & investment view of economic growth. I'm squarely in the Austrian camp on this, so I don't really care about spending, especially if it's fueled by government intervention to "spur aggregate demand". I disagree that you have to have inflation, especially when we talking about gold & bitcoin. The past 100 years of economics has been tuned to a fiat money + fractional reserve banking + debt + inflation paradigm. Considering bitcoin within this framework doesn't even make sense, as it will (probably) not be the currency of a whole economy. Also, there is more to the story concerning the Fed's balance sheet [1] and the link to inflation. [1] file:///C:/Users/Clark/Downloads/market-outlook-2014-03-why-the-feds-4-trillion-balance-sheet-isnt-creating-inflation.pdf
  - x1798DE 11y ago
    FYI that is a local link that will only work on your computer...
    - clarkmoody 11y ago
      Hahah, wow. Sorry about that. It auto-downloads the pdf, so the best I can do is a search result link. https://duckduckgo.com/l/?kh=-1&uddg=https%3A%2F%2Fwww.ubs.com%2Fus%2Fen%2Fwealth%2Fresearch%2FCIO-WMR-Research-Archives%2F_jcr_content%2Fpar%2Faccordionbox%2Flinklist_0%2Flink_33.1734866907.file%2FbGluay9wYXRoPS9jb250ZW50L2RhbS9XZWFsdGhNYW5hZ2VtZW50QW1lcmljYXMvZG9jdW1lbnRzL21hcmtldC1vdXRsb29rLTIwMTQtMDMtd2h5LXRoZS1mZWRzLTQtdHJpbGxpb24tYmFsYW5jZS1zaGVldC1pc250LWNyZWF0aW5nLWluZmxhdGlvbi5wZGY%3D%2Fmarket-outlook-2014-03-why-the-feds-4-trillion-balance-sheet-isnt-creating-inflation.pdf https://duckduckgo.com/l/?kh=-1&uddg=https%3A%2F%2Fwww.ubs.c...

gozur88 11y ago

Lack of inflation is a problem for governments, since it's a form of stealth taxation. I don't see any historical evidence it's stagnating - at least in the US the periods of highest growth weren't accompanied by inflation. Let me ask you this - as a user of currency, why would you want to use a currency that's worth less when you spend it than it was when you acquired it?

Terr_ 11y ago

Ideally you have neither, and the currency supply scales up (or down) with the amount of stuff in the economy. But if you must choose, it's better to err on the side of inflation because it keeps currency being used rather than hoarded as just-another-commodity.

Bombthecat 11y ago

The rich want that.