4 ms·

All currencies are supposed to infinitely lose value, gradually over time, in order to encourage labor to continue. So, yeah, they’re all supposed to lose “100%

All currencies are supposed to infinitely lose value, gradually over time, in order to encourage labor to continue. So, yeah, they’re all supposed to lose “100%” of their value, except that’s a weird way to quantify the value of currencies because to claim a percentage of it has been lost is an absolute measure, and not a relative one. If you said a currency lost 4% of its value year-over-year that would be high, sure. If you said a currency lost 25% of its value… so what? Relative to what? That’s not an important measurement. Cryptocurrencies are popular because “the sucker’s going up.” If they didn’t, they’d be little more interesting than PayPal transactions.

Breza 5y ago
> If they didn’t, they’d be little more interesting than PayPal transactions. I'd be a lot more excited about Bitcoin if it were that boring. If the speculators got out, it could be a viable payment method for everyday purchases. I bailed on Bitcoin in 2017 and didn't look back.
errantmind 5y ago
I disagree with your statement that all currencies are 'supposed' to be devalued. That is the conventional wisdom, but I've found no facts this is necessary. A deflationary currency may encourage some people to save instead of spend, and that will contract parts of the economy, but it is also more sustainable over the long run. I don't want to be 'encouraged' to buy a bunch of stuff I don't need, including being forced to invest in overpriced assets like stocks and real estate, simply because my currency is constantly losing value.
- deleted 5y ago
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- andrewmcwatters 5y ago
  I don't think you understand. It naturally happens as people create money (debt) to purchase things on their own volition. If people seek goods and services, debt will exist, and money supply will grow, devaluing the currency naturally. The only way you can avoid this is with a fixed money supply (e.g. the gold standard.) And when you fix the money supply, the owners of capital, versus a central bank, control the effective market average interest rate. Thats absolutely not a world you want to live in.
  - errantmind 5y ago
    I'm not sure why you assume people will always take on debt for purchases. I've never taken on debt to purchase anything, not once in my life, and I'm doing just fine. I own everything I use. I have my own business and never had to take out a loan. My wife runs her own business without ever having taken a loan. I don't know if I necessarily disagree with you about a fixed money supply being bad, but I don't think you provided enough information for me to agree with you either. With a fixed money supply, the FED would be less able to 'manage' the economy, but I think this being bad stems from your argument about money creation and debt. There are other ways for the FED to manage the money supply that have fallen out of favor as they aren't 'free market' enough, like credit/window guidance. That was formally implemented in Japan and led to their most prosperous era, all the way up until incompetence / malfeasance ruined their economy with lending quotas that had to be met, causing their asset bubble in the 1980s. Window guidance also works as an informal/cultural mechanism in Germany and is one of the reasons for their industrial success.

Breza 5y ago

> If they didn’t, they’d be little more interesting than PayPal transactions. I'd be a lot more excited about Bitcoin if it were that boring. If the speculators got out, it could be a viable payment method for everyday purchases. I bailed on Bitcoin in 2017 and didn't look back.

errantmind 5y ago

I disagree with your statement that all currencies are 'supposed' to be devalued. That is the conventional wisdom, but I've found no facts this is necessary. A deflationary currency may encourage some people to save instead of spend, and that will contract parts of the economy, but it is also more sustainable over the long run. I don't want to be 'encouraged' to buy a bunch of stuff I don't need, including being forced to invest in overpriced assets like stocks and real estate, simply because my currency is constantly losing value.

deleted 5y ago
[deleted]
andrewmcwatters 5y ago
I don't think you understand. It naturally happens as people create money (debt) to purchase things on their own volition. If people seek goods and services, debt will exist, and money supply will grow, devaluing the currency naturally. The only way you can avoid this is with a fixed money supply (e.g. the gold standard.) And when you fix the money supply, the owners of capital, versus a central bank, control the effective market average interest rate. Thats absolutely not a world you want to live in.
- errantmind 5y ago
  I'm not sure why you assume people will always take on debt for purchases. I've never taken on debt to purchase anything, not once in my life, and I'm doing just fine. I own everything I use. I have my own business and never had to take out a loan. My wife runs her own business without ever having taken a loan. I don't know if I necessarily disagree with you about a fixed money supply being bad, but I don't think you provided enough information for me to agree with you either. With a fixed money supply, the FED would be less able to 'manage' the economy, but I think this being bad stems from your argument about money creation and debt. There are other ways for the FED to manage the money supply that have fallen out of favor as they aren't 'free market' enough, like credit/window guidance. That was formally implemented in Japan and led to their most prosperous era, all the way up until incompetence / malfeasance ruined their economy with lending quotas that had to be met, causing their asset bubble in the 1980s. Window guidance also works as an informal/cultural mechanism in Germany and is one of the reasons for their industrial success.