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Burning cash is a poor analogy, apart from the destruction of the physical paper (which is very cheap). Burning cash causes a small amount of deflation, which i
by marvin 9y ago
Burning cash is a poor analogy, apart from the destruction of the physical paper (which is very cheap). Burning cash causes a small amount of deflation, which increases everyone else's fortune a tiny amount, but does not waste any human effort.
A better analogy would be digging a hole and filling it up again. Or maybe better, causing a small amount of destruction to something that other people value.
- craftyguy 9y ago> causing a small amount of destruction to something that other people value. Yea, like the environment.
- hn0 9y agoSo if I take a truckload of 100$ bills, a bottle of gin and a can of gasoline, drive into the dessert, out of sight of the authorities, and burn the entire lot, then the next night all retailers will have a vision which tells them to lower their average prices by 0.573%?
- BoiledCabbage 9y agoIs this comment sarcastic? I can't tell. The money supply affects prices. It's basic econ.
- vageli 9y agoHow fast does a change made by a private actor to the money supply propagate? Surely not instantaneously?
- marcosdumay 9y agoBy the time you fill your truck with those $100 bills, the prices will have already adjusted. If you decide to not burn them, but spend them quickly, the prices will adjust again.
- marvin 9y agoIt's a hypothetical point; a small reduction in money supply will affect prices far less than the uncertainty or random fluctuation in the measurement of prices.