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At this point the equities market is also gambling based on what the fed decides to do next.

dnautics 5y ago
> At this point the equities market is also gambling. FTFY "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth. "Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers," who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. - John Maynard Keynes (ironically) Technically he was talking about short term high inflation, but there is no mechanistic reason why this would be false for long-term low inflation, and it is exactly what we are seeing after 50 years of secular inflation as a policy.
- CPLX 5y ago
  > Technically he was talking about short term high inflation, but there is no mechanistic reason why this would be false for long-term low inflation I was with you until this point. There are absolutely reasons why there is a difference. Time is directional and irreversible and human life is exceedingly finite. Thus there will always be a higher value placed on money you get today versus money you get in the future. Given that money, itself, is not a productive or useful asset at rest, inflation at a rate consistent with the gradual increase of aggregate wealth is a natural and healthy outcome of the system.
  - pjc50 5y ago
    "In the long run we are all dead." -- also Keynes
  - dnautics 5y ago
    > Thus there will always be a higher value placed on money you get today versus money you get in the future Yeah, that SHOULD be the case because "money you get in the future" should be subject to existential risk. If you want to artificially "mobilize money" then you are going to get all sorts of fucked up things like environmental destruction in the service of thoughtless consumption ("spending on crappy shit from china is good for the economy!!1"), ponzi schemes, incentivised malinvestment, and cheating labor out of their wages: https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/ https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi... "it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis." Think about it this way: If we did not inflate the money, increased productivity (e.g. through technological efficiency gains) would result in everyone reaping the benefits, capitalism would be a rising tide that lifts all boats. Instead, we funnel those societal gains to the most privileged in our society, i.e. bankers and people who are good at writing government grants and good at getting awarded contracts.
smt88 5y ago
I agree.

> At this point the equities market is also gambling. FTFY "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth. "Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers," who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. - John Maynard Keynes (ironically) Technically he was talking about short term high inflation, but there is no mechanistic reason why this would be false for long-term low inflation, and it is exactly what we are seeing after 50 years of secular inflation as a policy.

CPLX 5y ago
> Technically he was talking about short term high inflation, but there is no mechanistic reason why this would be false for long-term low inflation I was with you until this point. There are absolutely reasons why there is a difference. Time is directional and irreversible and human life is exceedingly finite. Thus there will always be a higher value placed on money you get today versus money you get in the future. Given that money, itself, is not a productive or useful asset at rest, inflation at a rate consistent with the gradual increase of aggregate wealth is a natural and healthy outcome of the system.
- pjc50 5y ago
  "In the long run we are all dead." -- also Keynes
- dnautics 5y ago
  > Thus there will always be a higher value placed on money you get today versus money you get in the future Yeah, that SHOULD be the case because "money you get in the future" should be subject to existential risk. If you want to artificially "mobilize money" then you are going to get all sorts of fucked up things like environmental destruction in the service of thoughtless consumption ("spending on crappy shit from china is good for the economy!!1"), ponzi schemes, incentivised malinvestment, and cheating labor out of their wages: https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/ https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi... "it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis." Think about it this way: If we did not inflate the money, increased productivity (e.g. through technological efficiency gains) would result in everyone reaping the benefits, capitalism would be a rising tide that lifts all boats. Instead, we funnel those societal gains to the most privileged in our society, i.e. bankers and people who are good at writing government grants and good at getting awarded contracts.

smt88 5y ago

I agree.