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And this is inflation illustrated. When they talk about inflation being a rise in prices they are talking bullshit it is simply that they created more fiat curr

by Guthur 5y ago

And this is inflation illustrated. When they talk about inflation being a rise in prices they are talking bullshit it is simply that they created more fiat currency and so devalued what was there before, as perfectly illustrated. The importance of this distinction is that when your currency devalues its because the goverment (central bank branch thereof) consciously choose to print more and devalue it for you.

pavlov 5y ago
There are other causes of inflation, and a commodity-based currency makes it harder to control. You can see this in action in the historical inflation chart for the pound sterling (GBP), where data is available since 1750: https://www.in2013dollars.com/UK-inflation https://www.in2013dollars.com/UK-inflation The gold standard was suspended in 1931. You can see wild swings between inflation and deflation before that year (with an overall trend towards inflation, as the pound did lose value over the centuries). Most economists believe steady low inflation is preferable.
- aftbit 5y ago
  However most of the inflation that happened to the GBP between 1750 and 2022 happened in the last 100 years. £100 in 1750 was worth £400 in 1922 and £24000 in 2022. That's 4x in 172 years vs 60x in only 100 years.
  - pavlov 5y ago
    I think the WWI experience soured the British political class on the gold standard: wild inflation during the war, followed by serious deflation when it was time to rebuild. The swing is impressive in that buying power chart. Also, I'm sure the average British voter likes what has been achieved in the past hundred years and prefers inflation to having no money in a rigid class society.
    - notahacker 5y ago
      Yep. Having 15% inflation cancelled out by 15% deflation is superior to relatively consistent 2% inflation for rich people who don't need to spend their money, and prefer to preserve their wealth over decades without risking investing it in something productive. It's not for people who can afford 15% less food that year, or people trying to invest money in actual businesses.
overtomanu 5y ago
even the northern rial inflated because the dollar inflated. but i think theres no doubt that money printing did cause inflation
dang 5y ago
"Avoid unrelated controversies and generic tangents." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html The more generic topics tend to be more predictable, and they also tend to suck the smaller, more specific topics in like black holes. The result is repetitive discussion about the same few things, which is bad for curious conversation. Past explanations: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=generic%20discussion%20by%3Adang%20-flamewars%20-flamewar&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que... https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20black%20hole%20-pigment&sort=byDate&type=story&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

by Guthur 5y ago

pavlov 5y ago

There are other causes of inflation, and a commodity-based currency makes it harder to control. You can see this in action in the historical inflation chart for the pound sterling (GBP), where data is available since 1750: https://www.in2013dollars.com/UK-inflation https://www.in2013dollars.com/UK-inflation The gold standard was suspended in 1931. You can see wild swings between inflation and deflation before that year (with an overall trend towards inflation, as the pound did lose value over the centuries). Most economists believe steady low inflation is preferable.

aftbit 5y ago
However most of the inflation that happened to the GBP between 1750 and 2022 happened in the last 100 years. £100 in 1750 was worth £400 in 1922 and £24000 in 2022. That's 4x in 172 years vs 60x in only 100 years.
- pavlov 5y ago
  I think the WWI experience soured the British political class on the gold standard: wild inflation during the war, followed by serious deflation when it was time to rebuild. The swing is impressive in that buying power chart. Also, I'm sure the average British voter likes what has been achieved in the past hundred years and prefers inflation to having no money in a rigid class society.
  - notahacker 5y ago
    Yep. Having 15% inflation cancelled out by 15% deflation is superior to relatively consistent 2% inflation for rich people who don't need to spend their money, and prefer to preserve their wealth over decades without risking investing it in something productive. It's not for people who can afford 15% less food that year, or people trying to invest money in actual businesses.

overtomanu 5y ago

even the northern rial inflated because the dollar inflated. but i think theres no doubt that money printing did cause inflation

dang 5y ago

"Avoid unrelated controversies and generic tangents." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html The more generic topics tend to be more predictable, and they also tend to suck the smaller, more specific topics in like black holes. The result is repetitive discussion about the same few things, which is bad for curious conversation. Past explanations: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=generic%20discussion%20by%3Adang%20-flamewars%20-flamewar&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que... https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20black%20hole%20-pigment&sort=byDate&type=story&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...