5 ms·

> In the last 100 years nobody had lost a single penny to a bank run or default including 2008s WaMu default. Debasement of the currency, however, has been…hig

> In the last 100 years nobody had lost a single penny to a bank run or default including 2008s WaMu default. Debasement of the currency, however, has been…high. So you didn't "lose" that dollar from a hundred years ago, it's just worth about a penny now. Where'd the other $0.99 go?

arcticbull 6y ago
Another irrelevant talking point. The whole point of inflation is to encourage investment as money is only worth something as it flows through the economy. You’re not supposed to save money under the mattress you’re supposed to save value by purchasing assets. A hundred years ago buying roughly speaking any asset would have preserved your entire wealth or created tons of new wealth. Wages have on average kept pace with inflation. You keep a small slush fund for a rainy day in a savings account that at least partially offsets inflation and you invest the rest. You don’t save money, you save value. You transact money. If you’re saving money you’re doing it wrong. This is ECON101.
- IG_Semmelweiss 6y ago
  I respectfully disagree. The whole point of inflation is to monetize the crazy debt spirals by empires. Its why the romans did it, why the Germans did it, why the british did it , and its why we do it. It doesn't take an econ degree to know that. That was the reason the gold window was closed in the first place. If the whole point of inflation, mind you, is to encourage investment, then why does the fed react by spiking interest rates in the , 60s' 70's, 82 to address inflation...yet introducing a bona fide investment meltdown ? Thats what reveals the facade. If the purpose of inflation was to encourage investment, it is certainly an odd to react to inflation by increasing interest rates, and destroying business investment in the process. >>>>>>You’re not supposed to save money under the mattress, s you’re supposed to save value by purchasing assets. This sure sounds like you know better than everyone else. Its probably an attitude that would be frowned upon by someone that believes in freedom of choice, like we do in USA. >>>>Wages have on average kept pace with inflation. I don't know if that is true since you have no sources, but the total count of people living in the US under the poverty line is exactly where it was in 1959, and now, post pandemic, it is certainly far higher. So even if wages kept pace, which is uncertain, with technology advances and the dollar as the reserve currency, you would expect the total number of people to be lower. https://en.wikipedia.org/wiki/File:Number_in_Poverty_and_Poverty_Rate,_1959_to_2017.png https://en.wikipedia.org/wiki/File:Number_in_Poverty_and_Pov... >>>>>>>You keep a small slush fund for a rainy day in a savings account that at least partially offsets inflation and you invest the rest. You don’t save money, you save value. You transact money. If you’re saving money you’re doing it wrong. This is valid because there is inflation. But it saddens me to think that you think it is perfectly rational and acceptable to steal money from the savings of hardworking people, who often have to fend off scams left and right...and thus keep the money for themselves, for no real reason other than that it is what... you think.
  - arcticbull 6y ago
    >>> Gold Window The gold window was closed because gold was garbage money. A money supply you can’t adjust cannot respond to shocks and it can’t respond to changes in the economy or society. The crash in 2008 and again now would have been much much much worse without an ability to control supply. Inflation is defined in terms of supply and velocity. Velocity plummeted so supply was raised to offset and lo and behold the fed nailed its 2% inflation target in 2020 in spite of epic global chaos. Gold would have ruined us. >>> wages have kept pace with inflation. Wages are up 10% since 1963 on an inflation adjusted basis (https://www.google.com/amp/s/www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/%3famp=1 https://www.google.com/amp/s/www.pewresearch.org/fact-tank/2...). Google is your friend. Yes wealth inequality is a problem, that’s a fiscal and social issue not a monetary policy issue. Tax the rich. >>>> slush fund Nobody’s stealing anything. The inflation target is public and goaled on. Inflation has a purpose. You don’t like that purpose maybe because you don’t understand it maybe because you do, but it’s not theft. There is every chance we’d all be worse off under a 0% inflation environment because it would drastically reduce the liquidity that underlies the entire global economy. Think about it: if poor people have no money and real salary has kept pace with inflation what wealth is inflation reducing? And if we use a 0-inflation or negative inflation currency, what’s to say wages wouldn’t stay flat or go down. Again if you want to help the poor and narrow the gap, tax the rich, this inflation thing is just the game, and railing against it is tilting at the wrong windmills.
    - erichocean 6y ago
      > The gold window was closed because gold was garbage money. The gold windows was closed because the French decided to redeem their dollars for gold, and due to the rampant debasement of dollars, there wasn't enough gold available to do so. Source: history.
      - arcticbull 6y ago
        Sure and so it was garbage money; good money never had this problem yeah?
- frankenst1 6y ago
  What is your response to the argument that - CPI(-U) is not a suitable measurement of inflation anymore since it discarded fixed basket goods somewhere in the 90s and that - inflation measures with "old-school" fixed baskets report inflation rate in the range of 6-10%/year - production of goods became much more efficient but instead of being reflected in cheaper prices it increased shareholder profits and wealth inequalities?
  - arcticbull 6y ago
    My take on it re CPI is that I don’t know enough to know whether CPI is a suitable metric or not. I defer to economists here which is something you’re free to hold against me. Re (2) I’d be very interested in learning more about the delta between CPI and these baskets. Do you happen to have a reference? I’m always down to learn more. Re (3) I agree that inequality has gotten worse but I see that as a social and fiscal policy matter and not a monetary policy matter. If we’d been using gold, the same trend would have manifest. Poor people don’t hold onto money anyways they’re hand to mouth. And any extra they happen to hold onto could have been invested anyways. Frankly minimum wage over the period hasn’t been indexed to inflation either! I’m a huge advocate of decreasing the gap between the rich and poor, I have more than I need to be sure, and the best way to do that is taxation. This gap between rich and poor really started widening after the Reagan era tax cuts and trickle down economics. If you look back the top marginal tax rate in the US in much of the 1900s was 80-90%. Estate tax the same. If you reduce that to 37%, rich people get richer because they keep more and more of their wealth. A practically 0% estate tax ensures the next generation starts on a monopoly board where there’s a hotel on every square. To me that’s a much clearer correlation than the spooky action at a distance of this 2% (a figure you admittedly contested) inflation rate. Do the ultra wealthy really hold cash? Do the poor? Does anyone?
    - astrange 6y ago
      CPI matches other measures of inflation like http://bpp.mit.edu http://bpp.mit.edu pretty well. People who think inflation is high are cranks - the history of cranks goes from Austrians, to Shadowstats, and currently is on Chapwood Index. If we had inflation at 10% the economy would be smaller now than it was in 2010. It's under 2% and we can't get it up no matter how hard we try (not that hard so far.) > If you look back the top marginal tax rate in the US in much of the 1900s was 80-90%. Note that the effective rate was nothing like this because there were also lots of deductions.
- jkhdigital 6y ago
  Keynesian Econ 101, maybe. There are other schools of thought, which I personally find to be more rigorous and principled.

arcticbull 6y ago

Another irrelevant talking point. The whole point of inflation is to encourage investment as money is only worth something as it flows through the economy. You’re not supposed to save money under the mattress you’re supposed to save value by purchasing assets. A hundred years ago buying roughly speaking any asset would have preserved your entire wealth or created tons of new wealth. Wages have on average kept pace with inflation. You keep a small slush fund for a rainy day in a savings account that at least partially offsets inflation and you invest the rest. You don’t save money, you save value. You transact money. If you’re saving money you’re doing it wrong. This is ECON101.

IG_Semmelweiss 6y ago
I respectfully disagree. The whole point of inflation is to monetize the crazy debt spirals by empires. Its why the romans did it, why the Germans did it, why the british did it , and its why we do it. It doesn't take an econ degree to know that. That was the reason the gold window was closed in the first place. If the whole point of inflation, mind you, is to encourage investment, then why does the fed react by spiking interest rates in the , 60s' 70's, 82 to address inflation...yet introducing a bona fide investment meltdown ? Thats what reveals the facade. If the purpose of inflation was to encourage investment, it is certainly an odd to react to inflation by increasing interest rates, and destroying business investment in the process. >>>>>>You’re not supposed to save money under the mattress, s you’re supposed to save value by purchasing assets. This sure sounds like you know better than everyone else. Its probably an attitude that would be frowned upon by someone that believes in freedom of choice, like we do in USA. >>>>Wages have on average kept pace with inflation. I don't know if that is true since you have no sources, but the total count of people living in the US under the poverty line is exactly where it was in 1959, and now, post pandemic, it is certainly far higher. So even if wages kept pace, which is uncertain, with technology advances and the dollar as the reserve currency, you would expect the total number of people to be lower. https://en.wikipedia.org/wiki/File:Number_in_Poverty_and_Poverty_Rate,_1959_to_2017.png https://en.wikipedia.org/wiki/File:Number_in_Poverty_and_Pov... >>>>>>>You keep a small slush fund for a rainy day in a savings account that at least partially offsets inflation and you invest the rest. You don’t save money, you save value. You transact money. If you’re saving money you’re doing it wrong. This is valid because there is inflation. But it saddens me to think that you think it is perfectly rational and acceptable to steal money from the savings of hardworking people, who often have to fend off scams left and right...and thus keep the money for themselves, for no real reason other than that it is what... you think.
- arcticbull 6y ago
  >>> Gold Window The gold window was closed because gold was garbage money. A money supply you can’t adjust cannot respond to shocks and it can’t respond to changes in the economy or society. The crash in 2008 and again now would have been much much much worse without an ability to control supply. Inflation is defined in terms of supply and velocity. Velocity plummeted so supply was raised to offset and lo and behold the fed nailed its 2% inflation target in 2020 in spite of epic global chaos. Gold would have ruined us. >>> wages have kept pace with inflation. Wages are up 10% since 1963 on an inflation adjusted basis (https://www.google.com/amp/s/www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/%3famp=1 https://www.google.com/amp/s/www.pewresearch.org/fact-tank/2...). Google is your friend. Yes wealth inequality is a problem, that’s a fiscal and social issue not a monetary policy issue. Tax the rich. >>>> slush fund Nobody’s stealing anything. The inflation target is public and goaled on. Inflation has a purpose. You don’t like that purpose maybe because you don’t understand it maybe because you do, but it’s not theft. There is every chance we’d all be worse off under a 0% inflation environment because it would drastically reduce the liquidity that underlies the entire global economy. Think about it: if poor people have no money and real salary has kept pace with inflation what wealth is inflation reducing? And if we use a 0-inflation or negative inflation currency, what’s to say wages wouldn’t stay flat or go down. Again if you want to help the poor and narrow the gap, tax the rich, this inflation thing is just the game, and railing against it is tilting at the wrong windmills.
  - erichocean 6y ago
    > The gold window was closed because gold was garbage money. The gold windows was closed because the French decided to redeem their dollars for gold, and due to the rampant debasement of dollars, there wasn't enough gold available to do so. Source: history.
    - arcticbull 6y ago
      Sure and so it was garbage money; good money never had this problem yeah?
frankenst1 6y ago
What is your response to the argument that - CPI(-U) is not a suitable measurement of inflation anymore since it discarded fixed basket goods somewhere in the 90s and that - inflation measures with "old-school" fixed baskets report inflation rate in the range of 6-10%/year - production of goods became much more efficient but instead of being reflected in cheaper prices it increased shareholder profits and wealth inequalities?
- arcticbull 6y ago
  My take on it re CPI is that I don’t know enough to know whether CPI is a suitable metric or not. I defer to economists here which is something you’re free to hold against me. Re (2) I’d be very interested in learning more about the delta between CPI and these baskets. Do you happen to have a reference? I’m always down to learn more. Re (3) I agree that inequality has gotten worse but I see that as a social and fiscal policy matter and not a monetary policy matter. If we’d been using gold, the same trend would have manifest. Poor people don’t hold onto money anyways they’re hand to mouth. And any extra they happen to hold onto could have been invested anyways. Frankly minimum wage over the period hasn’t been indexed to inflation either! I’m a huge advocate of decreasing the gap between the rich and poor, I have more than I need to be sure, and the best way to do that is taxation. This gap between rich and poor really started widening after the Reagan era tax cuts and trickle down economics. If you look back the top marginal tax rate in the US in much of the 1900s was 80-90%. Estate tax the same. If you reduce that to 37%, rich people get richer because they keep more and more of their wealth. A practically 0% estate tax ensures the next generation starts on a monopoly board where there’s a hotel on every square. To me that’s a much clearer correlation than the spooky action at a distance of this 2% (a figure you admittedly contested) inflation rate. Do the ultra wealthy really hold cash? Do the poor? Does anyone?
  - astrange 6y ago
    CPI matches other measures of inflation like http://bpp.mit.edu http://bpp.mit.edu pretty well. People who think inflation is high are cranks - the history of cranks goes from Austrians, to Shadowstats, and currently is on Chapwood Index. If we had inflation at 10% the economy would be smaller now than it was in 2010. It's under 2% and we can't get it up no matter how hard we try (not that hard so far.) > If you look back the top marginal tax rate in the US in much of the 1900s was 80-90%. Note that the effective rate was nothing like this because there were also lots of deductions.
jkhdigital 6y ago
Keynesian Econ 101, maybe. There are other schools of thought, which I personally find to be more rigorous and principled.