5 ms·
> Will governments around the world begin to make their currency deflationary in order to make it attractive? rofl If you want people to use currency more, yo
by jms18 9y ago
> Will governments around the world begin to make their currency deflationary in order to make it attractive?
rofl
If you want people to use currency more, you make it inflate faster. This guy does not understand macroeconomics.
- clarkmoody 9y agoQ: How do you know macro economists have a sense of humor? A: They use decimals.
- kylnew 9y agothank you. I'm glad I'm not the only one who feels this article doesn't properly understand the intricacies of inflation/deflation in an economy
- ramontayag 9y agoYes, I certainly can't say I'm an economics expert. Mind sharing with me what part of the article you think is misguided?
- kylnew 9y agoYes. I posted my thoughts in another comment > https://news.ycombinator.com/item?id=15184382 https://news.ycombinator.com/item?id=15184382 Honestly, I'm kind of scared/surprised more people aren't talking about this.
- ramontayag 9y agoThanks for the link. I'm not sure where in the article I said inflation is worse than deflation. I don't feel I know enough about economics to express an opinion about this. What I'm trying to say is that if people have a choice, they'll keep their wealth in a currency that destroys their wealth the least slowly. This, I suspect, will have a runaway effect. We probably wouldn't be able to stop it if we tried, which sounds a lot like the AI singularity.
- kylnew 9y agoMy concern is that you ignore the effects of deflation in your argument altogether, which you simply cannot do. You are also effectively demoting the US dollar to the current inferior currency of the two to support your little adage, which I find a bit strange. I believe your intention was just to write a little thought experiment, which is cool. I'm just a little baffled the way some people follow along for the ride without question. Perhaps obvious, but I hold no cryptocurrency. I'm not saying I never would, but the sheer amount of dreamy speculation like this is exactly what keeps me away from the market.
- ramontayag 9y agoBy "effects of deflation", are you referring to the claimed ill-effects of deflation, that will grind the economy to a halt? If so, mind helping me understand why I can't disregard that? I appreciate your replies - not sure if I mentioned it earlier to you, but I posted it here in HN because there is no shortage of smart people willing to express their thoughts.
- kylnew 9y agoIt's a concern I have about deflationary currencies in general. It's not very common in the world right now so you could argue I'm speculating too, really. You are talking about the singularity being the point that we switch to crypto currency. I suppose my argument is that the singularity may not come because of deflation counteracting and convincing people to continue holding. All in all I'm glad it's been such a diplomatic discussion. I would engage people the same way if I were you and appreciate that you seek new information.
- ramontayag 9y agoI understand - I'm not aware of an asset class like bitcoin and the other cryptocurrencies, so I have to go with opinion and extrapolation for a lot of the thinking. :) It sounds like what you said is that the singularity may not happen because cryptocurrency deflation will make cryptocurrencies more attractive to hold compared to inflationary fiat. I'm fairly certain I understood it wrong. Won't people move more of the money into deflationary currencies if they are accessible and exchange friction between the inflationary one and deflationary one is acceptable? I appreciate the appreciation!
- millettjon 9y agoOld joke from engineering school: How did the economist cross the river? He assumed a boat.
- ramontayag 9y agoIf I read this comment right, I agree with you. People will use inflationary currencies more because they aren't as good as a store of value.