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I appreciate the response. I get that... (I think) I just don't get why that necessarily has anything to do with supply itself. It has to do with the distribut

I appreciate the response. I get that... (I think) I just don't get why that necessarily has anything to do with supply itself. It has to do with the distribution, and as a result, the quality or utility of the network. As you said, one person having 20 phones is off dubious value, but 20 additional people with phones might increase the network's quality. The supply (20) is independent of the resulting quality/saturation/useful node count. On the other hand, increased nodes could be seen as a negative. Like the US-Russia hotline. Or Facebook after it opened up to users without college email accounts. Sometimes supply might affect the quality of a network, and therefore the value of having a node (phone) on that network. But to say supply increases with demand is misleading, to me. Increased quality increases demand, at a rate greater than the rate demand is decreased due to increased supply. If supply happens to increase quality, then yes supply might dominate the equation such that demand increases as supply increases. But that doesn't mean the fundamental relationship between supply and demand has changed, it's just been minimized for particular cases. Or maybe I'm just getting confused by transitive semantics.

IggleSniggle 7y ago
I would agree with most of what you said here. To echo your semantics and in the greater context of this thread, I was merely pointing out that increasing the supply (and in the case of money, distribution/saturation) could increase the "quality" at a rate faster than the forces that that push the "quality" down in terms of "quality" per unit of currency. In the specific case of money, there is an additional group psychology at play: if you believe your money won't be worth as much tomorrow as it is today, then you should spend it today if you can. Since the value derived from currency is in its exchange (it's not producing any value sitting under a mattress), it increases the "quality" of the currency for it to be circulating.
- beerandt 7y ago
  Yea, if we're talking about money supply I suspect the phone comparison might be apt in a slightly different way. I haven't seen anyone touch on it in this thread, but I've read opinions where people have blamed companies for hoarding all of the newly available cash, especially for stock buybacks. If there's any truth to that, it would make sense, since companies can usually get better rates and first dibs at market level loans/ bonds/ etc than small business or individuals. In the phone analogy, (if we assume there's some value having multiple phones) this would be like a new dialing prefix being released, and companies buying up the numbers hundreds at a time at bulk rate discount, leaving little or no additional numbers for individuals. So supply was increased, but the businesses hoarding new numbers prevents any quality improvement if the network.

IggleSniggle 7y ago

I would agree with most of what you said here. To echo your semantics and in the greater context of this thread, I was merely pointing out that increasing the supply (and in the case of money, distribution/saturation) could increase the "quality" at a rate faster than the forces that that push the "quality" down in terms of "quality" per unit of currency. In the specific case of money, there is an additional group psychology at play: if you believe your money won't be worth as much tomorrow as it is today, then you should spend it today if you can. Since the value derived from currency is in its exchange (it's not producing any value sitting under a mattress), it increases the "quality" of the currency for it to be circulating.

beerandt 7y ago
Yea, if we're talking about money supply I suspect the phone comparison might be apt in a slightly different way. I haven't seen anyone touch on it in this thread, but I've read opinions where people have blamed companies for hoarding all of the newly available cash, especially for stock buybacks. If there's any truth to that, it would make sense, since companies can usually get better rates and first dibs at market level loans/ bonds/ etc than small business or individuals. In the phone analogy, (if we assume there's some value having multiple phones) this would be like a new dialing prefix being released, and companies buying up the numbers hundreds at a time at bulk rate discount, leaving little or no additional numbers for individuals. So supply was increased, but the businesses hoarding new numbers prevents any quality improvement if the network.