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The positive externalities from sound money and the concomitant demonetization of other assets (like real estate, oil, etc.) are massive, especially in the long

by wyager 5y ago

The positive externalities from sound money and the concomitant demonetization of other assets (like real estate, oil, etc.) are massive, especially in the long term.

arcticbull 5y ago
Real estate and oil are not money and therefore cannot be demonetized. One is a productive asset, the other a commodity. Words have meaning.
- wyager 5y ago
  > Words have meaning. Have you considered that you may simply be failing to comprehend the meaning? In particular, "monetization" literally means "the process of turning into money" - one of several more specific meanings, which should be clear from context, is the conversion of a non-monetized asset with sufficient monetary properties into a monetized asset. A monetized asset (not monetary - that term is too overloaded, although "monetized" isn't much better) is precisely an asset which has a higher value than would be predicted from its expected revenues, commodity consumption value, etc. If people are concerned about currency devaluation, where do they put their money? Whatever set of assets people turn to (equities, commodities, whatever) will be subject to additional demand purely qua wealth storage, pushing up the price of those assets beyond what you would expect from a pure discounted cash flow model - i.e. they become monetized (begin to function as money, in addition to whatever asset class one might naively assign them to). So, with that in mind, let's address: > Real estate and oil are not money and therefore cannot be demonetized If people are using real estate, oil, (gold, equities, ...) as a place to stash their wealth to protect it from inflation or whatever, and all of a sudden there's a better option available for this purpose, demand for random "not money" assets qua money is going to drop, and they will cease to behave like money - demonetization.

by wyager 5y ago

The positive externalities from sound money and the concomitant demonetization of other assets (like real estate, oil, etc.) are massive, especially in the long term.

arcticbull 5y ago

Real estate and oil are not money and therefore cannot be demonetized. One is a productive asset, the other a commodity. Words have meaning.

wyager 5y ago
> Words have meaning. Have you considered that you may simply be failing to comprehend the meaning? In particular, "monetization" literally means "the process of turning into money" - one of several more specific meanings, which should be clear from context, is the conversion of a non-monetized asset with sufficient monetary properties into a monetized asset. A monetized asset (not monetary - that term is too overloaded, although "monetized" isn't much better) is precisely an asset which has a higher value than would be predicted from its expected revenues, commodity consumption value, etc. If people are concerned about currency devaluation, where do they put their money? Whatever set of assets people turn to (equities, commodities, whatever) will be subject to additional demand purely qua wealth storage, pushing up the price of those assets beyond what you would expect from a pure discounted cash flow model - i.e. they become monetized (begin to function as money, in addition to whatever asset class one might naively assign them to). So, with that in mind, let's address: > Real estate and oil are not money and therefore cannot be demonetized If people are using real estate, oil, (gold, equities, ...) as a place to stash their wealth to protect it from inflation or whatever, and all of a sudden there's a better option available for this purpose, demand for random "not money" assets qua money is going to drop, and they will cease to behave like money - demonetization.