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I don't agree with GP that fiat currencies are part of the waste - but I think it is obvious that an enormous amount of economic activity goes into asset bubble
by pasabagi 9y ago
I don't agree with GP that fiat currencies are part of the waste - but I think it is obvious that an enormous amount of economic activity goes into asset bubbles, even open and generally acknowledged ones, like the housing market - or, in the most extreme case, bitcoin. I wouldn't be surprised if asset bubbles accounted for the majority of investment, even.
This ultimately causes a massive waste of time and resources - in the case of the housing market, it's resulted in young people paying far more of their income in rent - and consequently not spending it on more interesting things, like starting families or businesses.
- loceng 9y agoIndeed, for-profit industrial complexes are designed to perpetuate themselves, ever-increasing their prices, putting a constant negative pressure on the quality of life of everyone. These complexes or asset bubbles are easy and lazy investments for banks to make as well.
- rajacombinator 9y agoFiat currencies contribute largely to asset bubbles and malinvestment by suspending market forces. The Fed is actually on record stating their desire to create and reinflate asset bubbles, see Bernanke on “wealth effects.”
- loceng 9y agoWould this be possible if there was only a single, global currency, resulting in part where no single nation can print money? It feels like it would solve a bunch of major issues. It would obviously take a lot of delicate diplomacy to reach that goal.