3 ms·
3 functions of money: 1) Store of value 2) Unit of account 3) Medium of exchange Go ahead and design a money that you intend to have last forever (because g
by scottiebarnes 5y ago
3 functions of money:
1) Store of value
2) Unit of account
3) Medium of exchange
Go ahead and design a money that you intend to have last forever (because good design/engineering stands the test of time, right?)
Tell me which tradeoffs you make.
- dragonwriter 5y agoFor #1, I want increase in value over time, but don't care much about volatitlity or ease of exchange. For #2, I want low volatility (both in value and it's first derivative). For #3, I want low volatitlity in value and logistical ease of exchange. So, for #1, I want a different thing than for #2 & #3, for which I might want the same thing, since the needs are, though not identical, at least overlapping. Productive investments serve #1 well, so I’d leave it to them, and leave the design of money to balance #2 & #3.
- scottiebarnes 5y agoCongratulations, you created the Argentine Peso. You ended up in a debt crisis and had to hyperinflate your currency.
- dragonwriter 5y ago> Congratulations, you created the Argentine Peso I’m pretty sure I didn't invent anything, you just picked a random currency that meets neither your implicit goals not my explicit ones, because it's convenient for a pre-canned argument you wanted to make.
- scottiebarnes 5y agoAnd you didn't design anything either. You basically said you wanted a super fast car that's super light and has a huge gas tank and is cheap.