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Why are deflationary assets bad for the economy? We've been using gold and silver (as well as commodities that can go a long time such as wheat, barley, dates,

Why are deflationary assets bad for the economy? We've been using gold and silver (as well as commodities that can go a long time such as wheat, barley, dates, etc.) as currency for a long time now. That's a good balance we should strive to go back to. We shouldn't let the government and banks be able to print money at will, devaluing the hard work that people put to get their money in the first place. The people shouldn't have to pay the price of the government debt when it prints more money to cover its interest bearing loans. I am quite certain that this is one of the sources of distress that many people in the lower socioeconomic scale have towards the very rich, and I can't blame them. What do you think it feels like to work and save your money for the future, when the government actively makes it worth less?

pjkundert 6y ago
Absolutely agree with everything you said. However, it conflates two separate concerns. 1) Inflationary or Deflationary assets aren't useful money. Everyone wants to get rid of the former, and nobody will spend the latter. The very reason that gold and silver are useful money is because they traditionally have not inflated or deflated; they'll buy more or less (in real terms) about what they did 2,000 years ago. They only appear to be Deflationary, because we operate in such an Inflationary monetary milieu. 2) Return on investment on cash. Investing (lending) cash should return an ROI. It only does not because of central-bank interest rate interference. When we return to direct monetization, ie. wealth --> money without a banker in the middle, and algorithmically value-stable money, this will spell the doom of our tragic central-bank fiat-money experiment. This day is coming, sooner than anyone expects... ;)
- gher-shyu3i 6y ago
  > This day is coming, sooner than anyone expects... ;) I sure hope so! Since you're in the cryptocurrency field, I presume you're long Bitcoin/ETH/etc.?

pjkundert 6y ago

Absolutely agree with everything you said. However, it conflates two separate concerns. 1) Inflationary or Deflationary assets aren't useful money. Everyone wants to get rid of the former, and nobody will spend the latter. The very reason that gold and silver are useful money is because they traditionally have not inflated or deflated; they'll buy more or less (in real terms) about what they did 2,000 years ago. They only appear to be Deflationary, because we operate in such an Inflationary monetary milieu. 2) Return on investment on cash. Investing (lending) cash should return an ROI. It only does not because of central-bank interest rate interference. When we return to direct monetization, ie. wealth --> money without a banker in the middle, and algorithmically value-stable money, this will spell the doom of our tragic central-bank fiat-money experiment. This day is coming, sooner than anyone expects... ;)

gher-shyu3i 6y ago
> This day is coming, sooner than anyone expects... ;) I sure hope so! Since you're in the cryptocurrency field, I presume you're long Bitcoin/ETH/etc.?