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I think strictly limiting the ability for central banks to inflate the monetary supply (and use that created money to their own ends) is good for poor people. I

I think strictly limiting the ability for central banks to inflate the monetary supply (and use that created money to their own ends) is good for poor people. If it requires centralizing the global economy on gold, I certinaly think it would be worth it. However, an alternative would be to simply renationalize the Fed and put legislated limits on dollar monetary inflation. There are a lot of options here that don't involve going back to a gold standard. It kind of sounds like your argument is "gold is expensive, so how could it be good for the poor". Is that.. really the argument you're trying make here?

reedjosh 5y ago
> simply renationalize the Fed and put legislated limits on dollar monetary inflation. Nothing simple about that though since the current system benefits the most powerful. This _is_ why bitcoiners treat it like a religion. There is no traditional political way to return to sane monetary standards. Moving to BTC removes the untrustworthy governmental control from the equation. Bitcoin's energy usage is only necessary as a hedge against powerful actors trying to kill it. Proof of stake currencies are great, but it's likely if bitcoin hadn't paved the way, any such system would have been killed by a state actor since it hurts their main source of finance.
- billytetrud 5y ago
  Indeed. I meant its a simple idea. It would be simple to write a lwa for it. But of course, it would be politically fraught. Similarly tho, it wouldn't be politically simple to switch back to gold-backing. But yes, hopefully bitcoin can save us from this mess one day.
notahacker 5y ago
No, the argument people are making is that the interest rates associated with forcing inflation down further increase the returns the wealthy make lending money and the price the poor and people creating jobs for the poor pay to borrow money. We already have a legislated inflation target: it's 2%. We tried screwing around with raising interest rates to whatever level was necessary to try to hold absolute dollar amounts below a certain level instead in the early Reagan years and it was a quickly-abandoned disaster. The argument that imposing restrictions on the quantity of new assets the rich have already have lots of and the poor don't and need to borrow them would benefit the poor is the economic equivalent of positing a flat earth
- dragonwriter 5y ago
  > We already have a legislated inflation target: it's 2%. That’s a Fed rule of thumb long-run target, but its not legislated.
  - notahacker 5y ago
    Fair enough, strictly speaking their legislated objective only includes "stable prices" as one of their goals, but their publicly stated policy target of 2% is regarded as consistent with that legislated objective. The Bank of England's legislated objective is "price stability" alone complete with statutory responsibilities to justify all its actions in relation to that, which is also considered to be consistent with a 2% target.
    - dragonwriter 5y ago
      For the Fed (can’t speak to Bank of England), it has in legislation what is frequently referred to as a “dual mandate” of “maximum employment, stable prices and moderate long-term interest rates.” [0] The 2% Fed target explicitly is justified as balancing stability and employment. The ECB also has a 2% target, and its asymmetric explanation of stability may explain it: “By stable prices, we mean that prices should not go up (inflation) significantly, and an ongoing period of falling prices (deflation) should also be avoided.” [0] Note that they define stability as avoiding signficant inflation and also avoiding significant periods of (even small) deflation. [0] https://www.ecb.europa.eu/explainers/tell-me-more/html/stableprices.en.html https://www.ecb.europa.eu/explainers/tell-me-more/html/stabl...
      - imtringued 5y ago
        The bias towards inflation exists because it can reduce the real interest rate below 0%. Lowering interest rates below 0% is not practically possible. If we could hit negative interest rates deflation wouldn't be such a big deal.
        5y ago
RC_ITR 5y ago
>Is that.. really the argument you're trying make here? No? My argument is gold is a wildly impractical currency that does not align with the goals of contemporary society (new supply is randomly distributed to land owners, its extraction ruins valuable natural resources, it requires a significant amount of fossil fuels to move, etc.) I really wonder, why when the average low-income American is in nominal debt at fixed interest rates [0] that HN thinks inflation is bad for them (it is in fact bad for upper middle class savers like the majority of HN, so maybe that's why). [0]https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:125;series:Consumer%20credit;demographic:networth;population:1,3,5,7;units:levels https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
- billytetrud 5y ago
  Ok. Yes, gold does have those downsides, I agree. The upside is a limited supply and therefore limited ability to inflate the supply. > why when the average low-income American is in nominal debt at fixed interest rates [0] that HN thinks inflation is bad for them Many reasons. Monetary inflation doesn't just lead to devaluation of the currency - it doesn't just hurt lenders and holders of dollars. Monetary inflation extract Seigniorage from the people. Prices rise before wages, leading the poor to get poorer. The money is used by banks to extract interest from people they give loans to. Read my other comments on this thread tho. I'd rather not rehash it yet again.
  - RC_ITR 5y ago
    >Prices rise before wages Source? This Chart [0] seems to show they at least move in tandem (with wages maybe having the slight first mover edge). >The money is used by banks to extract interest from people they give loans to Again, I think you're poorly sourced. As sourced in the last comment, in the bottom 50% of US households, credit card debt is 50% of total debt (higher for lower percentiles, but the FED doesn't break that out), and as this chart [1] shows, credit card debt is priced independent of inflation. Where are banks using inflation to exploit the working class, exactly? [0] https://fred.stlouisfed.org/graph/?g=EK2n https://fred.stlouisfed.org/graph/?g=EK2n [1] https://fred.stlouisfed.org/graph/?g=EK2k https://fred.stlouisfed.org/graph/?g=EK2k

reedjosh 5y ago

> simply renationalize the Fed and put legislated limits on dollar monetary inflation. Nothing simple about that though since the current system benefits the most powerful. This _is_ why bitcoiners treat it like a religion. There is no traditional political way to return to sane monetary standards. Moving to BTC removes the untrustworthy governmental control from the equation. Bitcoin's energy usage is only necessary as a hedge against powerful actors trying to kill it. Proof of stake currencies are great, but it's likely if bitcoin hadn't paved the way, any such system would have been killed by a state actor since it hurts their main source of finance.

billytetrud 5y ago
Indeed. I meant its a simple idea. It would be simple to write a lwa for it. But of course, it would be politically fraught. Similarly tho, it wouldn't be politically simple to switch back to gold-backing. But yes, hopefully bitcoin can save us from this mess one day.

notahacker 5y ago

No, the argument people are making is that the interest rates associated with forcing inflation down further increase the returns the wealthy make lending money and the price the poor and people creating jobs for the poor pay to borrow money. We already have a legislated inflation target: it's 2%. We tried screwing around with raising interest rates to whatever level was necessary to try to hold absolute dollar amounts below a certain level instead in the early Reagan years and it was a quickly-abandoned disaster. The argument that imposing restrictions on the quantity of new assets the rich have already have lots of and the poor don't and need to borrow them would benefit the poor is the economic equivalent of positing a flat earth

dragonwriter 5y ago
> We already have a legislated inflation target: it's 2%. That’s a Fed rule of thumb long-run target, but its not legislated.
- notahacker 5y ago
  Fair enough, strictly speaking their legislated objective only includes "stable prices" as one of their goals, but their publicly stated policy target of 2% is regarded as consistent with that legislated objective. The Bank of England's legislated objective is "price stability" alone complete with statutory responsibilities to justify all its actions in relation to that, which is also considered to be consistent with a 2% target.
  - dragonwriter 5y ago
    For the Fed (can’t speak to Bank of England), it has in legislation what is frequently referred to as a “dual mandate” of “maximum employment, stable prices and moderate long-term interest rates.” [0] The 2% Fed target explicitly is justified as balancing stability and employment. The ECB also has a 2% target, and its asymmetric explanation of stability may explain it: “By stable prices, we mean that prices should not go up (inflation) significantly, and an ongoing period of falling prices (deflation) should also be avoided.” [0] Note that they define stability as avoiding signficant inflation and also avoiding significant periods of (even small) deflation. [0] https://www.ecb.europa.eu/explainers/tell-me-more/html/stableprices.en.html https://www.ecb.europa.eu/explainers/tell-me-more/html/stabl...
    - imtringued 5y ago
      The bias towards inflation exists because it can reduce the real interest rate below 0%. Lowering interest rates below 0% is not practically possible. If we could hit negative interest rates deflation wouldn't be such a big deal.
      - 5y ago

RC_ITR 5y ago

>Is that.. really the argument you're trying make here? No? My argument is gold is a wildly impractical currency that does not align with the goals of contemporary society (new supply is randomly distributed to land owners, its extraction ruins valuable natural resources, it requires a significant amount of fossil fuels to move, etc.) I really wonder, why when the average low-income American is in nominal debt at fixed interest rates [0] that HN thinks inflation is bad for them (it is in fact bad for upper middle class savers like the majority of HN, so maybe that's why). [0]https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:125;series:Consumer%20credit;demographic:networth;population:1,3,5,7;units:levels https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

billytetrud 5y ago
Ok. Yes, gold does have those downsides, I agree. The upside is a limited supply and therefore limited ability to inflate the supply. > why when the average low-income American is in nominal debt at fixed interest rates [0] that HN thinks inflation is bad for them Many reasons. Monetary inflation doesn't just lead to devaluation of the currency - it doesn't just hurt lenders and holders of dollars. Monetary inflation extract Seigniorage from the people. Prices rise before wages, leading the poor to get poorer. The money is used by banks to extract interest from people they give loans to. Read my other comments on this thread tho. I'd rather not rehash it yet again.
- RC_ITR 5y ago
  >Prices rise before wages Source? This Chart [0] seems to show they at least move in tandem (with wages maybe having the slight first mover edge). >The money is used by banks to extract interest from people they give loans to Again, I think you're poorly sourced. As sourced in the last comment, in the bottom 50% of US households, credit card debt is 50% of total debt (higher for lower percentiles, but the FED doesn't break that out), and as this chart [1] shows, credit card debt is priced independent of inflation. Where are banks using inflation to exploit the working class, exactly? [0] https://fred.stlouisfed.org/graph/?g=EK2n https://fred.stlouisfed.org/graph/?g=EK2n [1] https://fred.stlouisfed.org/graph/?g=EK2k https://fred.stlouisfed.org/graph/?g=EK2k