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This perfectly explains one of the many bull cases for cryptocurrencies. 15% annual inflation robs the working class of wealth but they previously had no altern

This perfectly explains one of the many bull cases for cryptocurrencies. 15% annual inflation robs the working class of wealth but they previously had no alternative. At least now they can store some of their assets in cryptocurrencies while the government continues to debase the purchasing power.

DangerousPie 6y ago
Because cryptocurrencies are famously stable?
- anm89 6y ago
  From a supply perspective, yes.
  - pjc50 6y ago
    The supply of Tether, on the other hand, makes a nonsense of the BTC/USD/USDT exchange rate.
  - AnimalMuppet 6y ago
    Nobody[1] gives a rip about the stability of the supply. They care about the stability of the value. ----- [1] OK, almost nobody. For crypto to be widely used, it needs a much more stable value.
    - anm89 6y ago
      Many people, my self included, care indirectly about the supply being limited, because they perceive that this will bode well for its value denominated in currencies which have supplies which aren't being tightly managed. I agree that in a vacuum nobody cares about the supply. I'm regards to the stability thing, bitcoin volatility has been steadily decreasing over time. It's still very young and has a lot of price discovery left to go. I personally believe its volatility profile will align with the normal range for commodities and currencies over the next let's say 20 years.
    - anm89 6y ago
      Many people, my self I clouded, care indirectly about the supply being limited, because they perceive that this will bode well for its value denominated in currencies which are being devalued. I agree that in a vacuum nobody cares about the supply.
loceng 6y ago
A global currency on the blockchain (democratically elected governments who implemented/join the union), where shenanigans can't be done or hidden from others - like printing of money - I agree with, in essence getting everyone on the same or at least a more even playing field, and with population oversight possible into spending of their own government.
dragonwriter 6y ago
> 15% annual inflation robs the working class of wealth Not, it robs those in the investor class that choose local currency as n investment vehicle for wealth. One is working class exactly to the extent one is dependent on current labor income. It's true that given fixed nominal wages, inflation implies a cut to wages, but Bitcoin doesn't provide an “alternative” that does anything for the working class against that unless it comes with the ability to compel employers to contract for wages that are nondecreasing when denominated in wages without employers reducing the starting level to compensate for the expected volatility and appreciation of BTC over the life of contract.
- gruez 6y ago
  >Not, it robs those in the investor class that choose local currency as n investment vehicle for wealth. One is working class exactly to the extent one is dependent on current labor income. Not really. The working poor are the exactly the kind of people who will put their savings in a savings account rather than a s&p500 index fund.
  - orwin 6y ago
    Ahah. No, the working poor are the kind of people that scrap everything, fidelity cards and discount coupons and sign in a new bank for that 100€ offer. My high score at my GED (equivalent) granted me 200€, that i immediately used. Yes, most of my middle-class friend kept that in their account, but 5 year later i was earning 50k/yr so i guess my investment in a refurbished computer was a good one. 5 to 10% inflation seems a good target tbh.
- AnimalMuppet 6y ago
  It robs the working class of wealth because of timing. The prices rise, then, later, the working class gets cost-of-living increases. That's anywhere from painful to devastating, depending on how low you are in the working class.
iso1631 6y ago
A deflationary currency like bitcoin would be awful, like all deflation.
- tastyfreeze 6y ago
  I have never understood why deflation is bad. The money I earn becomes worth more over time? GREAT! I would settle for money that just keeps its value over time. The only side deflation is bad for is the government that uses inflation as a tax.
  - orwin 6y ago
    Because unless your investment expectation in greater than the deflation value, you won't invest. Loans become too expensive and the default rate will be higher since there is less investment. And no more thing such as buying on credit. And if banks don't loan money and credit become a thing of the past, the money supply disappear. Also, unless deflationary money is decoupled from production , production will crumble and you will enter hyperinflation quickly.
    - tastyfreeze 6y ago
      Those all would be temporary effects as everybody adjusts. People still need to have a place to live, food to eat, cloths to wear, and ways to be entertained. Its not like everybody just stops spending money. They just get rewarded for whatever they have in savings. With savings people have more ability to take risks on investments. Deflation builds value in an economy.
  - ginko 6y ago
    If the value of your currency kept going up people would be incentivized to keep it in their bank accounts rather than spend it and invest in their economy. Of course this is certainly less of an issue than hyperinflation, but neither is great.
    - tastyfreeze 6y ago
jakub_g 6y ago
Turkey is huge on physical gold as well. People basically spend their money on gold immediately to avoid the inflation (from what I saw in some videos). The Grand Bazaar has dozens of gold shops.
throwaway3485t8 6y ago
Most Turks just keep their money in a foreign currency, or gold. If I am not mistaken, about 65% of the deposits in Turkey are denominated in a foreign currency (mostly USD)

DangerousPie 6y ago

Because cryptocurrencies are famously stable?

anm89 6y ago
From a supply perspective, yes.
- pjc50 6y ago
  The supply of Tether, on the other hand, makes a nonsense of the BTC/USD/USDT exchange rate.
- AnimalMuppet 6y ago
  Nobody[1] gives a rip about the stability of the supply. They care about the stability of the value. ----- [1] OK, almost nobody. For crypto to be widely used, it needs a much more stable value.
  - anm89 6y ago
    Many people, my self included, care indirectly about the supply being limited, because they perceive that this will bode well for its value denominated in currencies which have supplies which aren't being tightly managed. I agree that in a vacuum nobody cares about the supply. I'm regards to the stability thing, bitcoin volatility has been steadily decreasing over time. It's still very young and has a lot of price discovery left to go. I personally believe its volatility profile will align with the normal range for commodities and currencies over the next let's say 20 years.
  - anm89 6y ago
    Many people, my self I clouded, care indirectly about the supply being limited, because they perceive that this will bode well for its value denominated in currencies which are being devalued. I agree that in a vacuum nobody cares about the supply.

loceng 6y ago

A global currency on the blockchain (democratically elected governments who implemented/join the union), where shenanigans can't be done or hidden from others - like printing of money - I agree with, in essence getting everyone on the same or at least a more even playing field, and with population oversight possible into spending of their own government.

dragonwriter 6y ago

> 15% annual inflation robs the working class of wealth Not, it robs those in the investor class that choose local currency as n investment vehicle for wealth. One is working class exactly to the extent one is dependent on current labor income. It's true that given fixed nominal wages, inflation implies a cut to wages, but Bitcoin doesn't provide an “alternative” that does anything for the working class against that unless it comes with the ability to compel employers to contract for wages that are nondecreasing when denominated in wages without employers reducing the starting level to compensate for the expected volatility and appreciation of BTC over the life of contract.

gruez 6y ago
>Not, it robs those in the investor class that choose local currency as n investment vehicle for wealth. One is working class exactly to the extent one is dependent on current labor income. Not really. The working poor are the exactly the kind of people who will put their savings in a savings account rather than a s&p500 index fund.
- orwin 6y ago
  Ahah. No, the working poor are the kind of people that scrap everything, fidelity cards and discount coupons and sign in a new bank for that 100€ offer. My high score at my GED (equivalent) granted me 200€, that i immediately used. Yes, most of my middle-class friend kept that in their account, but 5 year later i was earning 50k/yr so i guess my investment in a refurbished computer was a good one. 5 to 10% inflation seems a good target tbh.
AnimalMuppet 6y ago
It robs the working class of wealth because of timing. The prices rise, then, later, the working class gets cost-of-living increases. That's anywhere from painful to devastating, depending on how low you are in the working class.

iso1631 6y ago

A deflationary currency like bitcoin would be awful, like all deflation.

tastyfreeze 6y ago
I have never understood why deflation is bad. The money I earn becomes worth more over time? GREAT! I would settle for money that just keeps its value over time. The only side deflation is bad for is the government that uses inflation as a tax.
- orwin 6y ago
  Because unless your investment expectation in greater than the deflation value, you won't invest. Loans become too expensive and the default rate will be higher since there is less investment. And no more thing such as buying on credit. And if banks don't loan money and credit become a thing of the past, the money supply disappear. Also, unless deflationary money is decoupled from production , production will crumble and you will enter hyperinflation quickly.
  - tastyfreeze 6y ago
    Those all would be temporary effects as everybody adjusts. People still need to have a place to live, food to eat, cloths to wear, and ways to be entertained. Its not like everybody just stops spending money. They just get rewarded for whatever they have in savings. With savings people have more ability to take risks on investments. Deflation builds value in an economy.
- ginko 6y ago
  If the value of your currency kept going up people would be incentivized to keep it in their bank accounts rather than spend it and invest in their economy. Of course this is certainly less of an issue than hyperinflation, but neither is great.
  - tastyfreeze 6y ago

jakub_g 6y ago

Turkey is huge on physical gold as well. People basically spend their money on gold immediately to avoid the inflation (from what I saw in some videos). The Grand Bazaar has dozens of gold shops.

throwaway3485t8 6y ago

Most Turks just keep their money in a foreign currency, or gold. If I am not mistaken, about 65% of the deposits in Turkey are denominated in a foreign currency (mostly USD)