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The core idea that I wanted to discuss is: If money is easy to debase then it will get debased a lot in the long term. That leads to inefficiencies in the marke

• dragonwriter 5y ago
  > If money is easy to debase then it will get debased a lot in the long term. What happens to money in the long term doesn't matter much, what happens in the short term does. Investment vehicles short-term fluctuation matters less, but their long-term performance matters more. > That leads to inefficiencies in the market, and in particular to less sustainable behaviour of people and less sustainable societies. I see no reason to believe that the long-term smooth decline in the value of money does that at all compared to achievable alternative behaviors of money. In fact, one of the reasons money is typically managed with a goal of low-but-positive inflation with low volatility is that there is quite a lot of experience suggesting the opposite.
• jstx1 5y ago
  Economies need a human-in-the-loop to adjust the settings every once in a while. That's what monetary policy does - it changes the money supply and interest rates as a response to what happens in the economy. Thinking that you can lock that policy in place once and let it run forever is naive - it just doesn't work in practice. This is why we don't have the gold standard anymore - it was a system so bad that it eventually broke and we had to move away from it. That's where all the talk about sound money ends - money has to be "unsound" in order to work in the real world.