3 ms·

I think it’s BS that everyone has to participate in the rigged game. Saving your money should be a valid option.

arcticbull 5y ago
Ok, let's dig in. > ... everyone has to participate in the rigged game. In what way exactly is the current system of separating a long-term store of value and a short-term medium of exchange a "rigged game?" In what way would fusing the two change that? Are you not able to replicate that which you desire by simple purchasing an asset that does that? For instance, let's say you're a coiner and think that's a better way to store value - does the current system prevent you from backing your personal economy with bitcoin? How about gold? Why would you force me into the one of your choice when maximum freedom dictates giving me the choice on how to store value? Further, how would you propose keeping the unit of value at a specific pegged constant value without managing the supply actively? When the population changes? Productivity changes? Transient shocks like COVID leading to massive drops in velocity? After all, a constant supply does not mean a constant value. You realize the fed literally avoided a catastrophic deflationary spiral and held the value of money to within +/- 0.6% last year. That's a heck of an accomplishment.
- munk-a 5y ago
  Well, they've never been at a full match with inflation but banks did use to actually pay interest on savings accounts once upon a time. I think it's reasonable to allow members of society that want to sit on cash to preserve their quantity to a certain extent in that manner - even if it will fall short of gains expected by inflation.
  - ghaff 5y ago
    They sort of can. There are CDs, treasuries, money market funds. Interest rates at the moment are pretty awful and I'm pretty much out of all that sort of thing. But they do exist.
  - arcticbull 5y ago
    Well, for one, you didn't really answer any of the questions I posited. But further, you have to consider the flip-side of receiving interest: paying it. Having low-cost access to capital makes businesses more efficient. It also makes your personal life cheaper as the average homeowner ends up on a 30-year fixed rate mortgage. A mortgage rate of 2.5% leaves you with way, way, way more free money than the 12% you'd have payed in the 70s. That's true even after factoring in inflation and historic wages.
- pattrn 5y ago
  It's important to consider that converting between the long-term store of value and the short-term medium of exchange is a taxable event, so if your asset gains value at exactly the same rate as inflation, you still end up losing money.
ghaff 5y ago
It's not clear to me what that means. I suppose you can go all Scarlett O'Hara and Land is the only thing that matters. But there has never in human history been some value store that was guaranteed to maintain value over time through war, technology changes, cultural/demographic/migration shifts, and yes inflation with modern currency instruments.
handmodel 5y ago
If you put the cash into gold, real estate, stocks, etc. it will maintain most of its value if not grow faster. Even putting it into low-interest CDs would help you preserve most of it.

Ok, let's dig in. > ... everyone has to participate in the rigged game. In what way exactly is the current system of separating a long-term store of value and a short-term medium of exchange a "rigged game?" In what way would fusing the two change that? Are you not able to replicate that which you desire by simple purchasing an asset that does that? For instance, let's say you're a coiner and think that's a better way to store value - does the current system prevent you from backing your personal economy with bitcoin? How about gold? Why would you force me into the one of your choice when maximum freedom dictates giving me the choice on how to store value? Further, how would you propose keeping the unit of value at a specific pegged constant value without managing the supply actively? When the population changes? Productivity changes? Transient shocks like COVID leading to massive drops in velocity? After all, a constant supply does not mean a constant value. You realize the fed literally avoided a catastrophic deflationary spiral and held the value of money to within +/- 0.6% last year. That's a heck of an accomplishment.

munk-a 5y ago
Well, they've never been at a full match with inflation but banks did use to actually pay interest on savings accounts once upon a time. I think it's reasonable to allow members of society that want to sit on cash to preserve their quantity to a certain extent in that manner - even if it will fall short of gains expected by inflation.
- ghaff 5y ago
  They sort of can. There are CDs, treasuries, money market funds. Interest rates at the moment are pretty awful and I'm pretty much out of all that sort of thing. But they do exist.
- arcticbull 5y ago
  Well, for one, you didn't really answer any of the questions I posited. But further, you have to consider the flip-side of receiving interest: paying it. Having low-cost access to capital makes businesses more efficient. It also makes your personal life cheaper as the average homeowner ends up on a 30-year fixed rate mortgage. A mortgage rate of 2.5% leaves you with way, way, way more free money than the 12% you'd have payed in the 70s. That's true even after factoring in inflation and historic wages.
pattrn 5y ago
It's important to consider that converting between the long-term store of value and the short-term medium of exchange is a taxable event, so if your asset gains value at exactly the same rate as inflation, you still end up losing money.

ghaff 5y ago

It's not clear to me what that means. I suppose you can go all Scarlett O'Hara and Land is the only thing that matters. But there has never in human history been some value store that was guaranteed to maintain value over time through war, technology changes, cultural/demographic/migration shifts, and yes inflation with modern currency instruments.

handmodel 5y ago

If you put the cash into gold, real estate, stocks, etc. it will maintain most of its value if not grow faster. Even putting it into low-interest CDs would help you preserve most of it.