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I save more than I spend, so wouldn't I be mainly using it as a store of value rather than a medium of exchange?
by omgbananas 9y ago
I save more than I spend, so wouldn't I be mainly using it as a store of value rather than a medium of exchange?
- seanmcdirmid 9y agoAre you investing your savings? No. Are you just holding it in a bank with little or no interest, then yes.
- kgwgk 9y agoEven holding it in a bank for low interest is investing. Using it as a store of value would be keeping it in your wallet or in a safe (as you would do with gold, for example).
- seanmcdirmid 9y agoNot really....not at these rates anyways. There isn’t much difference between putting your money in the bank or under your mattress, well, except for convenience and safety issues.
- kgwgk 9y agoYes, it is. If you keep the money physically it yields exactly zero and nobody is using it. If you lend the money (to a bank or someone else) you get some interest (or not, in some countries interest rates are negative) AND there is someone else who can use that money. Bank deposits are fundamentally different from “hoarding” gold or bitcoins.
- seanmcdirmid 9y agoSure, but the banks don’t thank us much for the pleasure. Money, gold, bitcoins aren’t themselves stores of value, merely IOUs. To really store value (I.e. production), you need things like grain silos.
- kgwgk 9y agoHow is a bitcoin sitting in your computer an IOU? Who owes what to whom precisely?
- ihsw2 9y agoTechnically yes, you are treating it as a property rather than currency. Such a property is subject to positive and negative externalities (notably, inflation/deflation), and (where applicable) it is subject to taxation on transference (eg: inheritance tax, gift tax, etc). From a purely economic perspective, cash is just another liquid asset. The distance from currency to store of value is quite short. Physical assets are generally regarded as stores of value, however, in modern times, currency stability has resulted in currency supplanting durable goods as the primary store of value.
- pbhjpbhj 9y agoThey're treating it as fiat money (which has more than one characteristic). Property has intrinsic value.
- deleted 9y ago[deleted]
- grey-area 9y agoI save more than I spend, so wouldn't I be mainly using it as a store of value rather than a medium of exchange? Yes, you would. I'm not clear what you mean by it here: If you mean Bitcoin, you're agreeing with my point, it's a good store of value first (modulo price volatility and external risks) If you mean Fiat, don't do that long term, use assets.