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The utility of money is the ability to trade it for any utility that is for sale. Money itself shouldn't have any inherent utility, other than being able to ref

by Geee 5y ago

The utility of money is the ability to trade it for any utility that is for sale. Money itself shouldn't have any inherent utility, other than being able to reference any other utility in the amount that the money holds value. It's like a magic wand that can make a wish true. The medium of money is just there to store and transfer the information for the amount of magic you can wield. This is why money is always overvalued compared to the medium's inherent utility. There are many other things that are overvalued, such as real estate - because there's an expectation that they can be used to trade for something else later. In other words, they're bought solely because they're expected to hold their buying power, i.e. they're used as money. The reason why this happens is because modern fiat money doesn't have this property - it's expected to not hold its buying power. Now, there is money that holds its buying power - bitcoin. It's expected that in the coming years most of the value from real estate and other overvalued assets will transfer into bitcoin, because there's no reason any more to own them other than for their utility.

UncleOxidant 5y ago
> There are many other things that are overvalued, such as real estate I'm not sure RE is overvalued. There's a shortage of houses at a time when Millennials (the largest generational cohort so far) are hitting peak household formation. > Now, there is money that holds its buying power Bitcoin peaked at around $64K in April 2020. Now it's currently at $38K - it was down to about $30K a month ago. Seems pretty volatile for something that "holds it's buying power".
- hakfoo 5y ago
  Isn't it less there being a shortage of houses, and more there being no way to dislodge market jams and speculators? I know the claim recently was that there were more unoccupied homes than homeless people. Even if you factor out the undesirable/impractical ones, I'd expect if we had some means to unlock that capacity, it would glut and crash the market down to (much closer to) affordability. It feels like this is one of many problems that are trivial to solve in the abstract, but intractable as long as we worship private-property rights. A simple fix would be an >100% annual value tax on unoccupied dwellings. The vacant-50-weeks-a-year vacation house, or the 'investment property' you're holding to sell in a few years, becomes an instant financial grenade, where it's better to hand the deed over to your pizza delivery guy as a tip than to be not living in it when the tax bill comes due.

by Geee 5y ago

UncleOxidant 5y ago

> There are many other things that are overvalued, such as real estate I'm not sure RE is overvalued. There's a shortage of houses at a time when Millennials (the largest generational cohort so far) are hitting peak household formation. > Now, there is money that holds its buying power Bitcoin peaked at around $64K in April 2020. Now it's currently at $38K - it was down to about $30K a month ago. Seems pretty volatile for something that "holds it's buying power".

hakfoo 5y ago
Isn't it less there being a shortage of houses, and more there being no way to dislodge market jams and speculators? I know the claim recently was that there were more unoccupied homes than homeless people. Even if you factor out the undesirable/impractical ones, I'd expect if we had some means to unlock that capacity, it would glut and crash the market down to (much closer to) affordability. It feels like this is one of many problems that are trivial to solve in the abstract, but intractable as long as we worship private-property rights. A simple fix would be an >100% annual value tax on unoccupied dwellings. The vacant-50-weeks-a-year vacation house, or the 'investment property' you're holding to sell in a few years, becomes an instant financial grenade, where it's better to hand the deed over to your pizza delivery guy as a tip than to be not living in it when the tax bill comes due.