4 ms·

> Ah you get it. That's the idea. Buy gold if you want, I don't care, but money is an intermediary, not a long-term store of value. Only because the wealthy be

> Ah you get it. That's the idea. Buy gold if you want, I don't care, but money is an intermediary, not a long-term store of value. Only because the wealthy benefit from depreciating currency. It doesn’t have to be this way, and it is this way because of policy that is designed to benefit the ultra-wealthy. > They're paying you less value so it's a decrease. You're tripping yourself up focusing on units. They’re paying the same, but the units depreciated because the oligarchs want workers’ wages to go down. > If you treat it as one you'll have a bad time. Just like if you treated your horse as a boat. Or treat a savings account as a savings account.

AngrySkillzz 6y ago
> Only because the wealthy benefit from depreciating currency Source this claim. Everyone benefits from a depreciating currency because inflation provides a buffer against deflationary spirals that lead to large recessions and job losses for people of all classes. Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. > because the oligarchs want workers’ wages to go down. I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory.
- chordalkeyboard 6y ago
  > Source this claim. Asset price inflation vs depreciation of debt in real terms. Wealthy people hold assets that are valued in currency. Depreciating currency causes those assets to go up in nominal terms, and additionally depreciating currency causes a flight to assets. Wealthy people (by definition) have more assets than non-wealthy people, hence this flight from currency to assets bids up the prices of assets. > Everyone benefits from a depreciating currency, because inflation provides a buffer against deflationary spirals that lead to large recessions. Thats a theory-laden and motivated explanation. Surely you can do better than just argument by assertion? > Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. Thats not my claim. > I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory. I suggest you do your own research and discover that the central bank is very much fact and not at all theory.
  - AngrySkillzz 6y ago
    > Depreciating currency causes those assets to go up in nominal terms That does not increase the real value of those assets, and it does not have any distributional consequences. > Thats a theory-laden and motivated explanation You could go read like, any of the vast literature on the great depression, the things that caused it and the things that made it worse. But you'd rather expose your ignorance on the Internet for us to see. > discover that the central bank is very much fact and not at all theory. I happen to know a lot about central banking, actually. You might be pulling a Dunning-Kruger on this one.
    - chordalkeyboard 6y ago
      > That does not increase the real value of those assets, Exactly correct. It decreases the value of the money use to pay for them, resulting in a higher nominal price and fewer people in society who are able to afford them, resulting in less access to capital for the majority of society. > and it does not have any distributional consequences. False. When assets go up relative to currency, fewer buyers can compete for those assets, leading to the wealthy owning more and the poor getting poorer. > But you'd rather expose your ignorance on the Internet for us to see. I’m quite sure I’ve acquitted myself satisfactorily in this discussion, if you feel the same about yourself, perhaps you’re the one who needs to peruse the literature. > I happen to know a lot about central banking, actually. You might be pulling a Dunning-Kruger on this one. Then how could you have been ignorant of Krugman’s statements to the effect that inflation was necessary because workers’ make too much money? Did you know he had said that? If so, why ask me for a source? If not, how much do you really know about central banks? Especially if you think that the words of several economists are evidence of some conspiracy?
      - AngrySkillzz 6y ago
        "Low, stable inflation increases inequality" is not a statement that you could find much agreement on from economists. Also, Krugman is just a pop-econ writer at this point. He is not a big deal in the economics profession. Yes, I am sure he understands how inflation and sticky wages interact. I am not so convinced that you understand it. Just going to repost my other comment for you to puzzle over: "You are purposefully ignoring the normal explanation, which is this: because wages are sticky, firms that need to cut costs in a recession are more likely to lay off people than they are to give pay cuts. Inflation helps to weaken that rigidity so that job losses are not as large. Maybe you know that. You claim that central banks depreciate the currency because they "think wages among the working class are too high." But rhetorically, you are doing more than just referring to the explanation I gave above. You are implying that central banks "think" working class wages are too high, and want to lower them to hurt working class people. Which is the opposite of the standard explanation - the purpose of inflation in that instance is to implicitly reduce the downward rigidity of wages so that employment does not contract as much in a downturn. Presumably you, champion of the working class, would rather more people be unemployed?"
arcticbull 6y ago
> Only because the wealthy benefit from depreciating currency. It doesn’t have to be this way, and it is this way because of policy that is designed to benefit the ultra-wealthy. Do they? Generally inflation benefits debtors and not lenders, because debts are denominated in dollars in the year of issue, and repaid in future dollars, which are worth 2% less per year. Overwhelmingly poor and middle class folks are debtors (think mortgages). Mortgages have become more and more affordable each year. This means folks can afford more and more house for the same money, after all the bulk of the payment of a 30 year fixed is interest for the first 10+ years. And sure enough, new homes are twice as large as they used to be. > They’re paying the same, but the units depreciated because the oligarchs want workers’ wages to go down. Yeah but at the end of that day that's irrelevant. The only thing that matters is what those units represent. If I gave you 5 today and 3 tomorrow does that mean anything? Or course not. 5 what and 3 what? That's what we're talking about > Or treat a savings account as a savings account. Totally, they offset about half of inflation because they collateralize loans. With interest rates this low, loan collateralization isn't a big value driver, so it doesn't pay much. It's your responsibility in a capitalist society to allocate capital most productively and so if this particular allocation isn't the most productive, your job is to go find a different allocation, or to pay the inflation premium. Nobody's ever been entitled to a risk-free return in a savings account. Money isn't a long-term store of value, it never was, and if you insist on jamming it into a round hole, you've failed to understand one of the most basic premises of modern society.
- chordalkeyboard 6y ago
  > Do they? Generally inflation benefits debtors and not lenders, because debts are denominated in dollars in the year of issue, and repaid in future dollars, which are worth 2% less per year. Yes, exactly. This allows wealthy people to borrow money and pay it back with less value. > Overwhelmingly poor and middle class folks are debtors (think mortgages). Poor people often don’t have access to these extremely low interest rates because of structural inequalities and credit requirements (and exceptions tend to leave them worse off as well, see the subprime fiasco). Meanwhile the cheap credit bids up the prices of those assets, benefitting the people who have them (wealthy) as opposed to the people buying them (upwardly mobile or aspirational). > Mortgages have become more and more affordable each year. This means folks can afford more and more house for the same money, after all the bulk of the payment of a 30 year fixed is interest for the first 10+ years. Not in aggregate, because the cost of a house increases as people bid for houses with the cheap credit. > Yeah but at the end of that day that's irrelevant. The only thing that matters is what those units represent. If I gave you 5 today and 3 tomorrow does that mean anything? Or course not. 5 what and 3 what? That's what we're talking about Right, and at the end of the day those units represent less value because of the actions of the central bank. Furthermore those actions were intended to have that exact effect. So how are you claiming that business owners are supposed to work in opposition to central bank policy? Clearly if the central bank wants wages to decrease in real terms, and business owners increase them nominally to make them neutral in real terms, this frustrates central bank policy and they will logically just print more money. > It's your responsibility in a capitalist society to allocate capital most productively and so if this particular allocation isn't the most productive, your job is to go find it. The problem is the distorting effect of low interest rates means that what is productive in terms of nominal r.o.i. is not what is productive in real terms, but the market distortions are so pervasive and persistent that people have to chase the nominal returns. This is incredibly destructive to value, society, and community.
dragonwriter 6y ago
> Only because the wealthy benefit from depreciating currency. Net debtors benefit from a depreciating currency, in first order effects. Beyond first order effects, a currency with gradual depreciation but low volatility benefits everyone. As everyone includes the rich, it is true that they benefit, but not especially true. > the units depreciated because the oligarchs want workers’ wages to go down. The alternative is not “employment at the same wages” when demand drops, it's “production cuts and unemployment, resulting in larger second order demand drop, resulting in more production cuts and unemployment, etc.” That this is generally worse for everyone including the working class, both as a whole and even many of the workers in the sector seeing the initial demand drop should be pretty easy to see.
- AngrySkillzz 6y ago
  Thanks, I am glad someone else actually has the energy to explain this.
- chordalkeyboard 6y ago
  > As everyone includes the rich, it is true that they benefit, but not especially true. Asst holders benefit disproportionately, as do debtors. The people who benefit most have both assets and debt. These are wealthy people. > The alternative is not “employment at the same wages” when demand drops, it's “production cuts and unemployment, resulting in larger second order demand drop, resulting in more production cuts and unemployment, etc.” So by tricking people into taking less compensation for the same amount of work, we benefit how? If demand decreases then production should decrease, because less production is indicated. > That this is generally worse for everyone including the working class, both as a whole and even many of the workers in the sector seeing the initial demand drop should be pretty easy to see. No, I’m seeing the opposite. When the automobile replaced the horse-and-buggy, demand for buggy whips decreased as it should have. printing money so that the buggy whip makers didn’t notice that there was less demand for their product would have been a disservice
  - AngrySkillzz 6y ago
    > people who benefit most have both assets and debt. These are wealthy people Generally you have to have more assets than debt to be considered "wealthy." This is why the word "net" is important in the parent comment. And you are completely ignoring the second-order effects, which is that an economy with low, stable inflation is good for everyone. And if you are going to quibble "why is low, stable inflation good for everyone," then look at the deflationary spirals of the great depression (or any pre-1900 crash) and any hyperinflationary economy of your choosing. > If demand decreases then production should decrease Okay Chairman, have it your way. COVID hits, demand plummets, we do nothing to try to keep people in jobs or keep the financial system from collapsing. Less production is indicated! > buggy whips This is a total red herring and you know it. No one is talking about counter-cyclical monetary policy and implying it is being used to keep anachronistic firms in business.

AngrySkillzz 6y ago

> Only because the wealthy benefit from depreciating currency Source this claim. Everyone benefits from a depreciating currency because inflation provides a buffer against deflationary spirals that lead to large recessions and job losses for people of all classes. Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. > because the oligarchs want workers’ wages to go down. I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory.

chordalkeyboard 6y ago
> Source this claim. Asset price inflation vs depreciation of debt in real terms. Wealthy people hold assets that are valued in currency. Depreciating currency causes those assets to go up in nominal terms, and additionally depreciating currency causes a flight to assets. Wealthy people (by definition) have more assets than non-wealthy people, hence this flight from currency to assets bids up the prices of assets. > Everyone benefits from a depreciating currency, because inflation provides a buffer against deflationary spirals that lead to large recessions. Thats a theory-laden and motivated explanation. Surely you can do better than just argument by assertion? > Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. Thats not my claim. > I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory. I suggest you do your own research and discover that the central bank is very much fact and not at all theory.
- AngrySkillzz 6y ago
  > Depreciating currency causes those assets to go up in nominal terms That does not increase the real value of those assets, and it does not have any distributional consequences. > Thats a theory-laden and motivated explanation You could go read like, any of the vast literature on the great depression, the things that caused it and the things that made it worse. But you'd rather expose your ignorance on the Internet for us to see. > discover that the central bank is very much fact and not at all theory. I happen to know a lot about central banking, actually. You might be pulling a Dunning-Kruger on this one.
  - chordalkeyboard 6y ago
    > That does not increase the real value of those assets, Exactly correct. It decreases the value of the money use to pay for them, resulting in a higher nominal price and fewer people in society who are able to afford them, resulting in less access to capital for the majority of society. > and it does not have any distributional consequences. False. When assets go up relative to currency, fewer buyers can compete for those assets, leading to the wealthy owning more and the poor getting poorer. > But you'd rather expose your ignorance on the Internet for us to see. I’m quite sure I’ve acquitted myself satisfactorily in this discussion, if you feel the same about yourself, perhaps you’re the one who needs to peruse the literature. > I happen to know a lot about central banking, actually. You might be pulling a Dunning-Kruger on this one. Then how could you have been ignorant of Krugman’s statements to the effect that inflation was necessary because workers’ make too much money? Did you know he had said that? If so, why ask me for a source? If not, how much do you really know about central banks? Especially if you think that the words of several economists are evidence of some conspiracy?
    - AngrySkillzz 6y ago
      "Low, stable inflation increases inequality" is not a statement that you could find much agreement on from economists. Also, Krugman is just a pop-econ writer at this point. He is not a big deal in the economics profession. Yes, I am sure he understands how inflation and sticky wages interact. I am not so convinced that you understand it. Just going to repost my other comment for you to puzzle over: "You are purposefully ignoring the normal explanation, which is this: because wages are sticky, firms that need to cut costs in a recession are more likely to lay off people than they are to give pay cuts. Inflation helps to weaken that rigidity so that job losses are not as large. Maybe you know that. You claim that central banks depreciate the currency because they "think wages among the working class are too high." But rhetorically, you are doing more than just referring to the explanation I gave above. You are implying that central banks "think" working class wages are too high, and want to lower them to hurt working class people. Which is the opposite of the standard explanation - the purpose of inflation in that instance is to implicitly reduce the downward rigidity of wages so that employment does not contract as much in a downturn. Presumably you, champion of the working class, would rather more people be unemployed?"

arcticbull 6y ago

> Only because the wealthy benefit from depreciating currency. It doesn’t have to be this way, and it is this way because of policy that is designed to benefit the ultra-wealthy. Do they? Generally inflation benefits debtors and not lenders, because debts are denominated in dollars in the year of issue, and repaid in future dollars, which are worth 2% less per year. Overwhelmingly poor and middle class folks are debtors (think mortgages). Mortgages have become more and more affordable each year. This means folks can afford more and more house for the same money, after all the bulk of the payment of a 30 year fixed is interest for the first 10+ years. And sure enough, new homes are twice as large as they used to be. > They’re paying the same, but the units depreciated because the oligarchs want workers’ wages to go down. Yeah but at the end of that day that's irrelevant. The only thing that matters is what those units represent. If I gave you 5 today and 3 tomorrow does that mean anything? Or course not. 5 what and 3 what? That's what we're talking about > Or treat a savings account as a savings account. Totally, they offset about half of inflation because they collateralize loans. With interest rates this low, loan collateralization isn't a big value driver, so it doesn't pay much. It's your responsibility in a capitalist society to allocate capital most productively and so if this particular allocation isn't the most productive, your job is to go find a different allocation, or to pay the inflation premium. Nobody's ever been entitled to a risk-free return in a savings account. Money isn't a long-term store of value, it never was, and if you insist on jamming it into a round hole, you've failed to understand one of the most basic premises of modern society.

chordalkeyboard 6y ago
> Do they? Generally inflation benefits debtors and not lenders, because debts are denominated in dollars in the year of issue, and repaid in future dollars, which are worth 2% less per year. Yes, exactly. This allows wealthy people to borrow money and pay it back with less value. > Overwhelmingly poor and middle class folks are debtors (think mortgages). Poor people often don’t have access to these extremely low interest rates because of structural inequalities and credit requirements (and exceptions tend to leave them worse off as well, see the subprime fiasco). Meanwhile the cheap credit bids up the prices of those assets, benefitting the people who have them (wealthy) as opposed to the people buying them (upwardly mobile or aspirational). > Mortgages have become more and more affordable each year. This means folks can afford more and more house for the same money, after all the bulk of the payment of a 30 year fixed is interest for the first 10+ years. Not in aggregate, because the cost of a house increases as people bid for houses with the cheap credit. > Yeah but at the end of that day that's irrelevant. The only thing that matters is what those units represent. If I gave you 5 today and 3 tomorrow does that mean anything? Or course not. 5 what and 3 what? That's what we're talking about Right, and at the end of the day those units represent less value because of the actions of the central bank. Furthermore those actions were intended to have that exact effect. So how are you claiming that business owners are supposed to work in opposition to central bank policy? Clearly if the central bank wants wages to decrease in real terms, and business owners increase them nominally to make them neutral in real terms, this frustrates central bank policy and they will logically just print more money. > It's your responsibility in a capitalist society to allocate capital most productively and so if this particular allocation isn't the most productive, your job is to go find it. The problem is the distorting effect of low interest rates means that what is productive in terms of nominal r.o.i. is not what is productive in real terms, but the market distortions are so pervasive and persistent that people have to chase the nominal returns. This is incredibly destructive to value, society, and community.

dragonwriter 6y ago

> Only because the wealthy benefit from depreciating currency. Net debtors benefit from a depreciating currency, in first order effects. Beyond first order effects, a currency with gradual depreciation but low volatility benefits everyone. As everyone includes the rich, it is true that they benefit, but not especially true. > the units depreciated because the oligarchs want workers’ wages to go down. The alternative is not “employment at the same wages” when demand drops, it's “production cuts and unemployment, resulting in larger second order demand drop, resulting in more production cuts and unemployment, etc.” That this is generally worse for everyone including the working class, both as a whole and even many of the workers in the sector seeing the initial demand drop should be pretty easy to see.

AngrySkillzz 6y ago
Thanks, I am glad someone else actually has the energy to explain this.
chordalkeyboard 6y ago
> As everyone includes the rich, it is true that they benefit, but not especially true. Asst holders benefit disproportionately, as do debtors. The people who benefit most have both assets and debt. These are wealthy people. > The alternative is not “employment at the same wages” when demand drops, it's “production cuts and unemployment, resulting in larger second order demand drop, resulting in more production cuts and unemployment, etc.” So by tricking people into taking less compensation for the same amount of work, we benefit how? If demand decreases then production should decrease, because less production is indicated. > That this is generally worse for everyone including the working class, both as a whole and even many of the workers in the sector seeing the initial demand drop should be pretty easy to see. No, I’m seeing the opposite. When the automobile replaced the horse-and-buggy, demand for buggy whips decreased as it should have. printing money so that the buggy whip makers didn’t notice that there was less demand for their product would have been a disservice
- AngrySkillzz 6y ago
  > people who benefit most have both assets and debt. These are wealthy people Generally you have to have more assets than debt to be considered "wealthy." This is why the word "net" is important in the parent comment. And you are completely ignoring the second-order effects, which is that an economy with low, stable inflation is good for everyone. And if you are going to quibble "why is low, stable inflation good for everyone," then look at the deflationary spirals of the great depression (or any pre-1900 crash) and any hyperinflationary economy of your choosing. > If demand decreases then production should decrease Okay Chairman, have it your way. COVID hits, demand plummets, we do nothing to try to keep people in jobs or keep the financial system from collapsing. Less production is indicated! > buggy whips This is a total red herring and you know it. No one is talking about counter-cyclical monetary policy and implying it is being used to keep anachronistic firms in business.