3 ms·

Central banks have (without evidence) claimed that deflation is a universally “bad thing” in order to justify inflating the currency every single year (AKA stea

Central banks have (without evidence) claimed that deflation is a universally “bad thing” in order to justify inflating the currency every single year (AKA stealing from savers, and transferring wealth to the people who are the earliest recipients of the inflated currency). Gold would have become the standard around the world if governments had not used coercion to prevent it from becoming so, and instead replacing it with fiat currency (which they can control and benefit from). If Bitcoin, or another cryptocurrency, replaces fiat, it’s value will be worth several orders of magnitude of what it’s worth today, which is why many people are holding it instead of spending it at the moment. However, people will not simply “horde” Bitcoin forever in anticipation of its price going up any more than people currently spend every single fiat dollar/euro/yen they have for fear of it going down in value due to inflation. You may ask, “but why WOULDN’T they hold it instead of spend it if they anticipate the value increasing each year?” The answer is because people HAVE to live in the here and now, they have to pay for things like food, rent, entertainment, cars, fuel, etc. So they can’t get around having to spend some amount of money to live. But sound money (money with low to no inflation) does cause people to spend LESS money than fiat currency because there’s a much larger opportunity cost.

soVeryTired 9y ago
> Central banks have (without evidence) claimed that deflation is a universally “bad thing” in order to justify inflating the currency every single year (AKA stealing from savers, and transferring wealth to the people who are the earliest recipients of the inflated currency). TIPS. JGBis. Linkers. Come on man, this makes you sound like a crank. Gold was the standard. It didn't work out very well.
- sbenitoj 9y ago
  TIPS and JGBIs are nothing but derivatives of un-sound money (fiat currency controlled by a small group of people, enforced by coercion), not examples of sound money people can choose as an alternative to fiat currency. The gold standard you’re talking about was far from a market gold standard, banks and governments colluded so banks could print more paper money than there was gold in storage. What specifically do you think “didn’t work out very well”?
slg 9y ago
Inflation encourages spending and investing while deflation encourages saving and hoarding. It isn't a surprise that people who want to see the economic activity want inflation over deflation. It also isn't a surprise why the general population would prefer deflation over inflation. I can understand how someone can make an ethical or moral argument for deflation, but I don't know how you make a economic argument that deflation is better for the future of the country than inflation.
- sbenitoj 9y ago
  There are certain people who benefit from inflation (banks who loan money, governments who have their debt denominated in fiat currency) and there are people who lose from inflation (anyone who saves their money in fiat, the value of which goes down the more money that’s printed). There is no such thing as something that’s “good/bad” for a “country” — countries don’t exist, only people do. Also, Bitcoin IS inflationary, there will continue to be more Bitcoin creates until sometime around year 2140 when the 21 Million supply cap is reached. It’s just not nearly as inflationary as fiat currencies, which have no cap and no one knows how much more will be created from year to year.
  - slg 9y ago
    Let me simplify things. Deflation is good for the individual. Inflation is good for the whole. It is basically the tragedy of the commons. What is good for a single person is not sustainable when scaled up to the whole of society. With deflation spending and investing are discouraged. That is bad for economic growth. Also you are wrong about Bitcoin being inflationary. An expanding money supply is not enough to make a currency inflationary. The rate of the increase in the money supply needs to outpace growth in the economy. That isn't happening with Bitcoin. The obvious proof of this fact is the increase in the value of Bitcoin.
    - polotics 9y ago
      Simplify? "Obvious proof is the increase?" One Bitcoin is still worth 1BTC in my books, inflationary dollars' drop in value notwithstanding.

soVeryTired 9y ago

> Central banks have (without evidence) claimed that deflation is a universally “bad thing” in order to justify inflating the currency every single year (AKA stealing from savers, and transferring wealth to the people who are the earliest recipients of the inflated currency). TIPS. JGBis. Linkers. Come on man, this makes you sound like a crank. Gold was the standard. It didn't work out very well.

sbenitoj 9y ago
TIPS and JGBIs are nothing but derivatives of un-sound money (fiat currency controlled by a small group of people, enforced by coercion), not examples of sound money people can choose as an alternative to fiat currency. The gold standard you’re talking about was far from a market gold standard, banks and governments colluded so banks could print more paper money than there was gold in storage. What specifically do you think “didn’t work out very well”?

slg 9y ago

Inflation encourages spending and investing while deflation encourages saving and hoarding. It isn't a surprise that people who want to see the economic activity want inflation over deflation. It also isn't a surprise why the general population would prefer deflation over inflation. I can understand how someone can make an ethical or moral argument for deflation, but I don't know how you make a economic argument that deflation is better for the future of the country than inflation.

sbenitoj 9y ago
There are certain people who benefit from inflation (banks who loan money, governments who have their debt denominated in fiat currency) and there are people who lose from inflation (anyone who saves their money in fiat, the value of which goes down the more money that’s printed). There is no such thing as something that’s “good/bad” for a “country” — countries don’t exist, only people do. Also, Bitcoin IS inflationary, there will continue to be more Bitcoin creates until sometime around year 2140 when the 21 Million supply cap is reached. It’s just not nearly as inflationary as fiat currencies, which have no cap and no one knows how much more will be created from year to year.
- slg 9y ago
  Let me simplify things. Deflation is good for the individual. Inflation is good for the whole. It is basically the tragedy of the commons. What is good for a single person is not sustainable when scaled up to the whole of society. With deflation spending and investing are discouraged. That is bad for economic growth. Also you are wrong about Bitcoin being inflationary. An expanding money supply is not enough to make a currency inflationary. The rate of the increase in the money supply needs to outpace growth in the economy. That isn't happening with Bitcoin. The obvious proof of this fact is the increase in the value of Bitcoin.
  - polotics 9y ago
    Simplify? "Obvious proof is the increase?" One Bitcoin is still worth 1BTC in my books, inflationary dollars' drop in value notwithstanding.