3 ms·

People are scared as hell of inflation and that's why the Fed was created. The "stable prices" thing is an elegant way to say "prevent inflation". Now people ar

People are scared as hell of inflation and that's why the Fed was created. The "stable prices" thing is an elegant way to say "prevent inflation". Now people are really upset that the Fed won't allow deflation and is pretty much encouraging inflation. They see this as a betrayal to the public and the reason why the Fed was created in the first place. There is a misalignment between the Fed inflation preference of 2% and the public inflation preference which is 0% or even -2% Enter BTC: what draws people to crypto is deflation. People love deflation, they gravitate towards crypto because deflation is hard built in protocol and it brings about financial nirvana for the saver: that is being able to increase one's net worth without doing any tangible work, manual or intellectual.

maxwell 5y ago
How much deflation is good? The point of Friedman-style 2% inflation seems to be to steadily, but not abruptly, drive up prices, increasing wages, increasing demand. I see the personal, anti-social case for "giving in to our greed", as the time traveler put it [1], but what are the social benefits of lowering production, wages, demand? 1. https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_timetraveler_from_the_future_here_to_beg/1 https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_time...
- ObserverNeutral 5y ago
  The time traveler post is really great . But the most absolutely bit is the "giving in to our greed" : "Why didn't we abandon Bitcoin, and move to another system? Well, we tried of course. We tried to step over to an inflationary cryptocurrency, but nobody with an IQ above 70 was willing to step up first and volunteer. After all, why would you voluntarily invest a lot of your money into a currency where you know your wealth will continually decline? The thing that made Bitcoin so dangerous to society was also what made it so successful. Bitcoin allows us to give into our greed." The whole social benefits thing that we somehow had up to now was pure luck. If bitcoin hodlers keep a low profile and don't spend there would not be any way to identify them and redistribute wealth. This is especially true for those who mined btc.
  - deleted 5y ago
    [deleted]

maxwell 5y ago

How much deflation is good? The point of Friedman-style 2% inflation seems to be to steadily, but not abruptly, drive up prices, increasing wages, increasing demand. I see the personal, anti-social case for "giving in to our greed", as the time traveler put it [1], but what are the social benefits of lowering production, wages, demand? 1. https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_timetraveler_from_the_future_here_to_beg/1 https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_time...

ObserverNeutral 5y ago
The time traveler post is really great . But the most absolutely bit is the "giving in to our greed" : "Why didn't we abandon Bitcoin, and move to another system? Well, we tried of course. We tried to step over to an inflationary cryptocurrency, but nobody with an IQ above 70 was willing to step up first and volunteer. After all, why would you voluntarily invest a lot of your money into a currency where you know your wealth will continually decline? The thing that made Bitcoin so dangerous to society was also what made it so successful. Bitcoin allows us to give into our greed." The whole social benefits thing that we somehow had up to now was pure luck. If bitcoin hodlers keep a low profile and don't spend there would not be any way to identify them and redistribute wealth. This is especially true for those who mined btc.
- deleted 5y ago
  [deleted]