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Central banking as it exists in the US is designed to encourage spending. One person’s spending becomes another’s income. Having finite dollars and increasing d
by andrewmcwatters 6y ago
Central banking as it exists in the US is designed to encourage spending. One person’s spending becomes another’s income. Having finite dollars and increasing demand leads to a currency that only increases in value. If an asset increases in value, there is an incentive to acquire it and not part with it.
- jkhdigital 6y agoNo matter how much I read on the subject, I always feel like the true nature and complexity of money eludes me. I don’t mean to disparage your comments, but I believe they reflect a lack of appreciation for the magnitude of the subject.
- andrewmcwatters 6y agoI agree with you. I don’t mean to suggest economic machinations are trivial, but some of the comments in this subthread raise counterpoints that I think casually dismiss the original points.
- traceddd 6y agoIt’s true, but hardly limited to this subthread. While I disagree with most of HN about cryptocurrency and economics, the discussions are significantly more considerate and studied than anything I’ve come across in my daily life. Even society’s proclaimed experts seem to have an admittedly limited understanding and predictive capability. At the core, economics are an expression of collective human desire and thus it seems it will never be truly rigorous.
- brighton36 6y agoMoney is a faith.
- voodootrucker 6y agoPut your faith in the entire human history of scarcity leading to optimization, or you can try the US Federal Reserve and Bretton Woods.
- volume 6y agowhat I don't understand is Modern Monetary Theory: https://www.investopedia.com/modern-monetary-theory-mmt-4588060 https://www.investopedia.com/modern-monetary-theory-mmt-4588... Could it be that all this worry about printing money really doesn't matter?
- seibelj 6y agoAs long as the US dollar is the global reserve currency, then forcing all other countries to accept our infinite printing is easier. But MMT will incentivize foreign countries to use alternatives, and when the US dollar is no longer a reserve currency, the game is over. MMT also requires the government to rapidly increase and reduce taxes, from my research on it. All of this makes it intellectual masturbation, plus a very terrible idea IMO.
- anonymouse008 6y agoIt only doesn't matter as long as your demand outstrips supply -- Read as: as long as others want access and are not fully satiated to you, your affiliates, or what you both possess
- ayyy 6y agoSo, yes. Also, if the answer is "no", we're already very screwed.
- doggosphere 6y agoYes, the problem with this power is the inevitable folly of short term fixes (through interest rates and government stimulus) by mortgaging future value. The pressures and short term thinking of believing you can fix your economy catches up to everyone eventually. We are in an era where saving does not exist, where interest rates are negative.
- beaner 6y agoMany believe this to be a good thing. To discuss it we'd have to go all the way down the keynesian vs. austrian rabbit hole. Someone here might be up for it. I'm content to sit on the sidelines and watch it continue to succeed and speak for itself.
- andrewmcwatters 6y agoYeah, I agree. That’s actually a really interesting discussion, too!
- humaniania 6y agoHow could a lower velocity of money be a good thing when there's still underemployment?
- gzu 6y agoCentral banks are trying to prop up the deflationary structural changes happening in the broader world economies due to aging demographics and technology reducing the value of human labor. The end result is an enormous asset bubble as their only solution is to print money to prevent any actual deflation from happening as that would implode the financial system.
- seebetter 6y agoYes but the inflation will come in 5-7 years. Just in time to liquidate the amount of debt the government owes. Pretty clever trick but it’s only a random accident of the financialized systems that make modern life possible. It’s like how all the pandemic chaos only increased corporate profits and government power. It’s just endless consistent accidents that never benefit 95% of people.
- legulere 6y agoCentral banks seem to accept low deflation now. At least here in Germany we have low deflation. The money the central banks print is not for preventing inflation. They would need to put money in the hands of common people, but it just stays in the financial system and keeps asset prices up.