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> The reason why we have inflation and debt is to keep the value of our currencies stable. I'm not following. By definition, inflation is what happens when the

by pid-1 5y ago

> The reason why we have inflation and debt is to keep the value of our currencies stable. I'm not following. By definition, inflation is what happens when the price of a currency is not stable. > Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce Agreed. But in countries with high inflation, such as mine, you will lose money if all your wealth is stored as fiat.

Retric 5y ago
Stability operates on short and long time scales. 2% annual inflation means a currency is worth 99.994% as much tomorrow as it was today which in practice is generally fine. Even fairly high inflation levels of say 7% annually can still be quite stable on a daily or monthly basis which is all you really need. As most people spend most of their paycheck every month and savings aren’t limited to the currency in question. By comparison crypto coins tend to have much higher daily and monthly variations which isn’t a big deal for savings, but in practice it discourages their use for day to day expenses.
RobertoG 5y ago
You should look more into the real causes of inflation in your country, because they are probably not what you think Even without knowing what country you are from, I would bet that inflation is because imports and exports imbalances and nothing to do with "printing too much money". And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?
- hutzlibu 5y ago
  "And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?" Those are the traditional means and are usually banned or strongly regulated, if the states money is at stake.
  - mgh2 5y ago
    Where are you from? What were your options before crypto?
blacksqr 5y ago
There is a huge difference between moderate inflation and ruinous hyperinflation. For example, before last year Australia had gone almost 30 years without a recession [0], in large part because their central bank's inflation target is a few points higher than the US's hard 2% ceiling. This gives their bank more flexibility in controlling the money supply. That kind of stability is more beneficial to the middle class than any negatives that may come with that level of inflation. [0] https://www.nytimes.com/2020/09/02/business/australia-recession.html https://www.nytimes.com/2020/09/02/business/australia-recess...
- barrenko 5y ago
  Not sure why you're so downvoted.
  - fouric 5y ago
    "Please don't comment about the voting on comments. It never does any good, and it makes boring reading."[1] And if you're going to break the guidelines and comment on voting anyway, the very least that you could do is also add some value to the discussion, e.g. add some thoughts/elaboration/support for the points made. [1]https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- roenxi 5y ago
  > For example, before last year Australia had gone almost 30 years without a recession [0], in large part because their central bank's inflation target is a few points higher than the US's hard 2% ceiling. Australia has gone 30 years without recession because we're supplying commodities like iron into the most miraculously productive miracle in all of recorded history, aka mainland China. And because we've got one of the highest rates of net migration in the developed world. On a per capita basis Australia has had recessions, and it is a stretch to say that our inflation target did anything relative to all the other countries that have inflation targets.
zopa 5y ago
And that's fine. If you need stuff now, spend; if you don't, invest, at whatever risk level you're comfortable with. Just hanging onto purchasing power while doing neither is bad for the economy if too many people try it.
pjc50 5y ago
I will concede that switching out of a high-inflation currency to a stable one is a good idea, and that for many people using cryptocurrency is the only way of circumventing their country's laws on the subject. However, bitcoin experiences 10-20% drops against the USD on a regular basis. It looks like this announcement has triggered another one. It's not stable, it's just (a) appreciated over time a lot and (b) is doing better against the USD than, say, the Argentine peso. > By definition, inflation is what happens when the price of a currency is not stable Inflation is what happens when the price of goods and services in a currency is not stable. It can be triggered without a change in the money supply by underlying shocks to the real economy (e.g. 70s oil shocks) Bitcoin claims to guarantee money supply stability, but it cannot guarantee price stability.
gwbas1c 5y ago
> But in countries with high inflation, such as mine, you will lose money if all your wealth is stored as fiat That's also the case in countries with low inflation. That's why, in the US, wealthy people don't stuff cash in mattresses, or keep most of their wealth in general bank accounts. They buy stocks, bonds, real estate, ect. This is also why, in the US, investment vehicles like 401ks and IRAs are highly encouraged.

by pid-1 5y ago

Retric 5y ago

Stability operates on short and long time scales. 2% annual inflation means a currency is worth 99.994% as much tomorrow as it was today which in practice is generally fine. Even fairly high inflation levels of say 7% annually can still be quite stable on a daily or monthly basis which is all you really need. As most people spend most of their paycheck every month and savings aren’t limited to the currency in question. By comparison crypto coins tend to have much higher daily and monthly variations which isn’t a big deal for savings, but in practice it discourages their use for day to day expenses.

RobertoG 5y ago

You should look more into the real causes of inflation in your country, because they are probably not what you think Even without knowing what country you are from, I would bet that inflation is because imports and exports imbalances and nothing to do with "printing too much money". And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?

hutzlibu 5y ago
"And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?" Those are the traditional means and are usually banned or strongly regulated, if the states money is at stake.
- mgh2 5y ago
  Where are you from? What were your options before crypto?

blacksqr 5y ago

There is a huge difference between moderate inflation and ruinous hyperinflation. For example, before last year Australia had gone almost 30 years without a recession [0], in large part because their central bank's inflation target is a few points higher than the US's hard 2% ceiling. This gives their bank more flexibility in controlling the money supply. That kind of stability is more beneficial to the middle class than any negatives that may come with that level of inflation. [0] https://www.nytimes.com/2020/09/02/business/australia-recession.html https://www.nytimes.com/2020/09/02/business/australia-recess...

barrenko 5y ago
Not sure why you're so downvoted.
- fouric 5y ago
  "Please don't comment about the voting on comments. It never does any good, and it makes boring reading."[1] And if you're going to break the guidelines and comment on voting anyway, the very least that you could do is also add some value to the discussion, e.g. add some thoughts/elaboration/support for the points made. [1]https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
roenxi 5y ago
> For example, before last year Australia had gone almost 30 years without a recession [0], in large part because their central bank's inflation target is a few points higher than the US's hard 2% ceiling. Australia has gone 30 years without recession because we're supplying commodities like iron into the most miraculously productive miracle in all of recorded history, aka mainland China. And because we've got one of the highest rates of net migration in the developed world. On a per capita basis Australia has had recessions, and it is a stretch to say that our inflation target did anything relative to all the other countries that have inflation targets.

zopa 5y ago

And that's fine. If you need stuff now, spend; if you don't, invest, at whatever risk level you're comfortable with. Just hanging onto purchasing power while doing neither is bad for the economy if too many people try it.

pjc50 5y ago

I will concede that switching out of a high-inflation currency to a stable one is a good idea, and that for many people using cryptocurrency is the only way of circumventing their country's laws on the subject. However, bitcoin experiences 10-20% drops against the USD on a regular basis. It looks like this announcement has triggered another one. It's not stable, it's just (a) appreciated over time a lot and (b) is doing better against the USD than, say, the Argentine peso. > By definition, inflation is what happens when the price of a currency is not stable Inflation is what happens when the price of goods and services in a currency is not stable. It can be triggered without a change in the money supply by underlying shocks to the real economy (e.g. 70s oil shocks) Bitcoin claims to guarantee money supply stability, but it cannot guarantee price stability.

gwbas1c 5y ago

> But in countries with high inflation, such as mine, you will lose money if all your wealth is stored as fiat That's also the case in countries with low inflation. That's why, in the US, wealthy people don't stuff cash in mattresses, or keep most of their wealth in general bank accounts. They buy stocks, bonds, real estate, ect. This is also why, in the US, investment vehicles like 401ks and IRAs are highly encouraged.