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Whether you think inflation is justified or not does not negate the argument. It is still theft. If savers did not have money, economists would not have anythin
by sparkie 8y ago
Whether you think inflation is justified or not does not negate the argument. It is still theft. If savers did not have money, economists would not have anything to inflate. The inflation benefits the money printer, because they spend it at the market rate at the time of printing, but by the time it works its way through the economy, the effect is reduced purchasing power for the saver or consumer.
Yes, inflation is a deterrent on saving, pushing people to instead invest their money. Whether it is a good thing that people blow all of their money on junk consumer goods is another question.
What if some people just want to save, and not take risks? Well, it's their own choice, and now they are able to make such choice because there are no economists controlling the monetary policy of Bitcoin. What you think was justified previously, might no longer be possible. If we slip into depression due to deflation again, we might have to come up with some other solution, which isn't just kicking the can down the road.
- api 8y agoI consider this debate an unresolved issue in economics. We don't know how to create a genuinely balanced and productive economy. Option #1: deflationary economy where monetary velocity collapses and with it employment, investment, and innovation, ending in permanent depression (dark age) and slavery to a money-hoarding landed rentier class. Board game: Monopoly. Option #2: inflationary economy that prioritizes spending and investment over saving, runs on debt, and ends with slavery to consumerism, bullshit jobs, and landfills overflowing with junk. Board game: Risk. Pick your poison. In the 20th century most nations went for option #2 because those that didn't tended to be overcome by the financial and military power of those that did. China is currently performing the most extreme inflationary economics experiment in history. This post makes me remember a definition I heard once in school of economics: "the science of why everything sucks."
- armin_maurice 8y agoI mean it is resolved, and your two options kind of show it. The resolution is very low and slow inflationary economics, to match the growth rate in the economy. This should prioritize a safe level of saving and investment. Higher and lower rates of inflation can be enforced (via central banks) to help fight recession or demand driven inflation (price level increases). However constantly tweaking inflation rates to get the exact right level for the current period of countries economic cycle (debt/savings levels, price levels etc...) is quite difficult. So yes we do know "how" to balance an economy in a general sense, in the same way we know how to build a web application in the general sense, but there is always work do be done in the details.
- api 8y agoWe've been trying to do that. The problem is that macroeconomic inflation is a big sausage number that doesn't really say much about the reality on the street. Take a look at this: http://thesoundingline.com/why-inflation-is-much-worse-than-the-headline-numbers-suggest/ http://thesoundingline.com/why-inflation-is-much-worse-than-... Price stability has only been achieved for a few categories of things and the divergence is huge.
- root_axis 8y ago> What if some people just want to save, and not take risks? Well, it's their own choice, and now they are able to make such choice because there are no economists controlling the monetary policy of Bitcoin. That's absurd. Putting money into bitcoin is about as risky as it gets besides vegas.