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How do you fix our current monetary system??? You cant... its also generally much easier to make change by starting from scratch rather than trying to move an e
by deevolution 8y ago
How do you fix our current monetary system??? You cant... its also generally much easier to make change by starting from scratch rather than trying to move an entire establishment. If the innovation catches on, the old establishement will crumble.
- asynchrony 8y agoYour premise is to "fix" the monetary system, but you failed to articulate the issues that you want to resolve.
- hndamien 8y agoCurrency debasement.
- asynchrony 8y agoInflation is a desirable feature in a currency. A currency should be a medium of exchange. Deflation encourages people to hold currency rather than exchange it.
- hndamien 8y agoI don't find it at all desirable that some people have the right to devalue my holdings. It is farcical to think that people would hold the medium of exchange forever if it kept increasing in value because at some point they would either have so much that they would prefer to convert (some of) it into material wealth or chase something with a higher rate of return. Alternatively they would have so little that they would have no choice but to convert it to survive. You cannot eat the medium of exchange.
- asynchrony 8y agoPlease don't take this the wrong way, but you sound financially illiterate. Cash is not meant to be held long term. It's meant to be spent or invested. That's how the economy continues to grow.
- acct1771 8y agoDefine "economy growing", all the way to the end.
- asynchrony 8y agoYou can replace "grow" with "function" if you prefer.
- acct1771 8y agoNo, I'm going to hold you to the original word, because, if you look around - that's what's happening. Our population grows. Our footprint grows. Our consumption and waste grow. Nobody, besides those highest, benefit from this style of function.
- asynchrony 8y agoYes, human civilization has been doing this for quite a long time. I'm not really sure what your point is relative to inflation.
- acct1771 8y agoMaybe the "economy" continuing to rally is not a good thing, for, yknow, society?
- asynchrony 8y agoThere must some ironic meaning of "economy" that I'm not aware of. Societies have gone through many recessions and depressions. Is that what you're advocating?
- ibeckermayer 8y agoSays the guy that blatantly apes business school propaganda...
- 8y ago
- pjc50 8y agoThis all comes down to "MV=PQ", a description of the relation between money supply and real economic activity. Normally as the real economy expands (+Q) the amount of money is increased to keep it growing (+M). Without that either the quantity of transactions falls (-V) or the price level falls (deflation, -P). Alternatively, think about what price stability really means. If a loaf of bread costs $1, an hour of work $10, a barrel of oil $50, and a house $500k today ... how do you really ensure that they cost exactly that in 50 years when you come to retire? You can't. In a real economy there are real reasons for shifts in the price level.
- hndamien 8y agoIf you have a fixed money supply that is infinitely divisible, prices would be expected to fall due to deflation and increased purchasing power. Relative values of bread, hour of work, barrel of oil and a house should remain the same (with the caveat that their real values actually change - eg if we become an electric car economy then the relative price of oil in big macs will change). This makes no difference to anything of substance, it is just mathematics and psychology. The only real substantive issue is with debt repayments with deflationary currency, in which case I'd advise thinking hard about your loan terms.
- asynchrony 8y agoI think your point about infinite divisibility is an interesting one. But the main downside is that there is no incentive to exchange the currency (a pizza or ownership in a business) when you know that the currency will be more in a year than it is worth today.