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I don't believe it will be a benefit. Current monetary policy is to keep inflation positive and low, while addressing economic shocks that make money velocity
by eek04_ 6y ago
I don't believe it will be a benefit. Current monetary policy is to keep inflation positive and low, while addressing economic shocks that make money velocity low by increasing the supply.
A low positive inflation effectively makes all prices that are denominated in a fixed amount of the currency slowly lower. This helps the economy - ie, people and companies acting in the economy - deal with changes more easily, since their contracted prices are going down. It also avoids the problem with deflation: Keeping money to spend in the future makes more sense to an individual, thus money velocity goes down, thus less things happen (and all actors earn less.)
That's also why increasing the money supply for crises is good: It allows the same activity to go on, even if each unit of currency moves less. People can get paid the same even if everybody save up money. If there's a fixed amount of currency, they can't, since the currency that would be used to pay them is now bound up in their savings.
- nathias 6y ago> A low positive inflation effectively makes all prices that are denominated in a fixed amount of the currency slowly lower. This helps the economy - ie, people and companies acting in the economy This helps the people who have capital and is paid for by the people who only have wages. I am a person that only has a wage, so I choose bitcoin.
- eek04_ 6y agoIt helps ~everybody by making everything adapt. People that just earn wages too.