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I will take deflation over inflation any day of the week. Inflation punishes good behavior of people who save money and create cushions for the pissible bad day

I will take deflation over inflation any day of the week. Inflation punishes good behavior of people who save money and create cushions for the pissible bad days. It robs people of their savings. I've been storing my life savings in crypto, and so far it's been phenomenal compared to my USD ones. Deflation actually forces you to think of how to spend money more rationally, not to buy junk that will pollute the planet. (yes, I know BTC mining isn't great for the emissions, and I wouldn't recommend BTC anyway)

woodruffw 5y ago
> I will take deflation over inflation any day of the week. Inflation punishes good behavior of people who save money and create cushions for the pissible[sic] bad days. It robs people of their savings. As an individual, deflation benefits me too. But that's because you and I are individual actors, not a government in charge of maintaining a diverse economy of actors. To cut the entire thing short: the general undesirability of deflation is considered a settled matter in economics. Just about any resource will help explain why that is, and why we (agents in the economy) benefit from small amounts of inflation.
xapata 5y ago
Deflation forces the economy to grind to a halt. I hope that's not the only way to fight climate change and pollution.
- ekianjo 5y ago
  > Deflation forces the economy to grind to a halt. extraordinary claim that requires extraordinary proof.
- bufferoverflow 5y ago
  No, it doesn't. Electronics is pretty much a deflationary market, and it's hot. Think about it, if you wait a year, you can buy the same PC or a smartphone for much less. Yet people buy them like mad. Deflationary grinds stupid chachki markets to a grind maybe. The stuff that pollutes the planet.
  - woodruffw 5y ago
    These two points are in conflict: the mass electronics market is the stupid tchotchke market, which you’ve correctly observed is hot despite decreasing unit costs. Edit: This can be explained by the disconnect between unit price (which is indeed decreasing for consumer electronics) from unit value (which is relatively stable for consumer electronics, especially post-Moore). Consumers don't care if their laptop is "worth" 40% less YoY if the laptop they hold off for is only 0.5% faster. So it's not clear where the deflation is.
    - bufferoverflow 5y ago
      > the mass electronics market is the stupid tchotchke market No, it's not. Very few people can afford to buy new smartphones/laptops/TVs for fun. Most consider their purchase for a while, choose the right model, and then use it for a few years. Most people use these tools daily, hourly even. These are not random tchotchkes. But pretty much everyone can buy some dumb dollar store toy for their kid, only for the kid to play with it once or twice and lose all interest.
      - xapata 5y ago
        Has your life really changed that much since computers? I guess I have a different career, but in most respects it's about the same. These things are addictive little tchotchkes I can't seem to put down. My wife was just complaining about the Nest products I buy and then never take out of the box.
        bufferoverflow 5y ago
        Yes, didn't everyone's life change since computers? They are everywhere, they govern pretty much all aspects of our lives. It's hard for me to name a niche that they haven't permeated.
        xapata 5y ago
        In many ways, life today is the same as it was 2000 years ago. It's hard to decide what axes to use to measure similarity/distance in the space of human experience.
imtringued 5y ago
> Inflation punishes good behavior of people who save money and create cushions for the pissible bad days If everyone did that, then there wouldn't be enough currency in circulation to actually do work. This is known as the paradox of thrift. There is a nice version of it with baby sitting coupons: http://www.pkarchive.org/theory/baby.html http://www.pkarchive.org/theory/baby.html TL;DR people can panic buy money the same way they can panic buy toilet paper, except money is absolutely essential for commercial employment and thereby cripples the economy through a depression. >It robs people of their savings. Well, you cannot save in money as money has no inherent value. The best you can do is let people promise value in the future which is exactly how our money system works. Think about it this way, you have money, the other person has 40 hours of free time this week. You save your money and the week is over, the other person was unemployed and couldn't do anything since you didn't spend your money. Ultimately that debt shouldn't exist and therefore the savings shouldn't exist either. The problem is that humans age but money does not. Thus, money allows you to isolate yourself from the "storage costs" of e.g. human labor and in a general sense it allows you to isolate yourself from losses in the economy. Isn't that strange? Insisting that those losses should never reach you is quite selfish and would give you a lot of power over those who don't own money. I hope you see where this is going. People save, not because it is virtuous or good behavior, it's simply profitable to not be the one in debt and therefore being able to shove the problem onto someone else. E.g. see Germany shifting debt to Greece and pretending to be the good guy. Now, imagine if we solved the inflation problem. 0% inflation every single year. The storage costs problem wouldn't be gone. The system would have to actively pass on storage costs and losses in the real economy to those holding money e.g. through negative interest rates. When people actively realize that their short term deposits are not profitable, they will either work less as they already have enough and let someone else work, or they save their money as long term deposits which have higher yields or finally they directly invest their money. All three options are better than pretending that there is something where there is nothing. The problem with deflation is that holding onto money becomes more profitable, which actively sabotages the medium of exchange function of money and directly competes with commercial employment. People can't trade and actually working by e.g. building cars doesn't bring in as much money. One could argue that deflation is the epitome of an anti work culture.
- 5y ago

woodruffw 5y ago

> I will take deflation over inflation any day of the week. Inflation punishes good behavior of people who save money and create cushions for the pissible[sic] bad days. It robs people of their savings. As an individual, deflation benefits me too. But that's because you and I are individual actors, not a government in charge of maintaining a diverse economy of actors. To cut the entire thing short: the general undesirability of deflation is considered a settled matter in economics. Just about any resource will help explain why that is, and why we (agents in the economy) benefit from small amounts of inflation.

xapata 5y ago

Deflation forces the economy to grind to a halt. I hope that's not the only way to fight climate change and pollution.

ekianjo 5y ago
> Deflation forces the economy to grind to a halt. extraordinary claim that requires extraordinary proof.
bufferoverflow 5y ago
No, it doesn't. Electronics is pretty much a deflationary market, and it's hot. Think about it, if you wait a year, you can buy the same PC or a smartphone for much less. Yet people buy them like mad. Deflationary grinds stupid chachki markets to a grind maybe. The stuff that pollutes the planet.
- woodruffw 5y ago
  These two points are in conflict: the mass electronics market is the stupid tchotchke market, which you’ve correctly observed is hot despite decreasing unit costs. Edit: This can be explained by the disconnect between unit price (which is indeed decreasing for consumer electronics) from unit value (which is relatively stable for consumer electronics, especially post-Moore). Consumers don't care if their laptop is "worth" 40% less YoY if the laptop they hold off for is only 0.5% faster. So it's not clear where the deflation is.
  - bufferoverflow 5y ago
    > the mass electronics market is the stupid tchotchke market No, it's not. Very few people can afford to buy new smartphones/laptops/TVs for fun. Most consider their purchase for a while, choose the right model, and then use it for a few years. Most people use these tools daily, hourly even. These are not random tchotchkes. But pretty much everyone can buy some dumb dollar store toy for their kid, only for the kid to play with it once or twice and lose all interest.
    - xapata 5y ago
      Has your life really changed that much since computers? I guess I have a different career, but in most respects it's about the same. These things are addictive little tchotchkes I can't seem to put down. My wife was just complaining about the Nest products I buy and then never take out of the box.
      - bufferoverflow 5y ago
        Yes, didn't everyone's life change since computers? They are everywhere, they govern pretty much all aspects of our lives. It's hard for me to name a niche that they haven't permeated.
        xapata 5y ago
        In many ways, life today is the same as it was 2000 years ago. It's hard to decide what axes to use to measure similarity/distance in the space of human experience.

imtringued 5y ago

> Inflation punishes good behavior of people who save money and create cushions for the pissible bad days If everyone did that, then there wouldn't be enough currency in circulation to actually do work. This is known as the paradox of thrift. There is a nice version of it with baby sitting coupons: http://www.pkarchive.org/theory/baby.html http://www.pkarchive.org/theory/baby.html TL;DR people can panic buy money the same way they can panic buy toilet paper, except money is absolutely essential for commercial employment and thereby cripples the economy through a depression. >It robs people of their savings. Well, you cannot save in money as money has no inherent value. The best you can do is let people promise value in the future which is exactly how our money system works. Think about it this way, you have money, the other person has 40 hours of free time this week. You save your money and the week is over, the other person was unemployed and couldn't do anything since you didn't spend your money. Ultimately that debt shouldn't exist and therefore the savings shouldn't exist either. The problem is that humans age but money does not. Thus, money allows you to isolate yourself from the "storage costs" of e.g. human labor and in a general sense it allows you to isolate yourself from losses in the economy. Isn't that strange? Insisting that those losses should never reach you is quite selfish and would give you a lot of power over those who don't own money. I hope you see where this is going. People save, not because it is virtuous or good behavior, it's simply profitable to not be the one in debt and therefore being able to shove the problem onto someone else. E.g. see Germany shifting debt to Greece and pretending to be the good guy. Now, imagine if we solved the inflation problem. 0% inflation every single year. The storage costs problem wouldn't be gone. The system would have to actively pass on storage costs and losses in the real economy to those holding money e.g. through negative interest rates. When people actively realize that their short term deposits are not profitable, they will either work less as they already have enough and let someone else work, or they save their money as long term deposits which have higher yields or finally they directly invest their money. All three options are better than pretending that there is something where there is nothing. The problem with deflation is that holding onto money becomes more profitable, which actively sabotages the medium of exchange function of money and directly competes with commercial employment. People can't trade and actually working by e.g. building cars doesn't bring in as much money. One could argue that deflation is the epitome of an anti work culture.

5y ago