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A rational actor would never spend a deflationary currency since it would gain value as deflation happens. If everyone was rational, no money would ever change
by quickthrowman 5y ago
A rational actor would never spend a deflationary currency since it would gain value as deflation happens. If everyone was rational, no money would ever change hands. You can’t have a functional monetary system without liquidity or exchanging of currency.
Bitcoin is a deflationary currency (for now)
- deleted 5y ago[deleted]
- robocat 5y agoYou could equivalently say that a rational actor would never sell any equity or property that was appreciating faster than inflation. A deflationary currency would only be one of many different investments, and people will buy and sell based on their expected gains and risks of other holdings.
- anonporridge 5y agoSo that's why retirees who have their money in investments that constantly increase in value over time never spend money? Come on man. This argument is patently absurd. I expect better from the HN community. The only thing an inflationary currency does is wipe out the savings of the poor who don't have knowledge or the privilege to invest in harder and/or income generating assets.
- louloulou 5y agoA rational actor will exchange money for food rather than starve to death, regardless of whether the currency they are using is deflationary or not. Your argument is nonsense.
- karmakurtisaani 5y agoThat rational actor doesn't need to be a human. In fact, the concept of rational actor makes more sense in the context of corporations. Now, imagine a corporation hoards a trillion dollars worth of a deflationary currency. Will it invest it back to the economy as eagerly as it would an inflationary currency?
- anonporridge 5y agoA corporation has fixed costs to continue existing, even if it's not directly food. Any possible rational actor you can come up with will have some need to trade with external actors.