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In definition 1: > as by embezzlement In definition 2: > attributed to … volume of money and credit We’d be able to conclude that “inflation is theft” from

In definition 1: > as by embezzlement In definition 2: > attributed to … volume of money and credit We’d be able to conclude that “inflation is theft” from noting that inflation is driven by “printing money”, whether paper or credit, and that the benefits illicitly go to those in control of the financial system to the detriment of others — which the other poster would likely characterize as “embezzlement”. So you proved that person right — at least to people who view the Federal Reserve and large banks as in a self interested cabal. By embezzling the funds they print, eg giving special access to friends, they engage in theft towards society at large.

deleted 5y ago
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ajross 5y ago
> from noting that inflation is driven by “printing money” It's not. Or it can be, in the case of the linked article referencing Argentine hyperinflation. But what we're seeing right now isn't. The US government does not, as a rule, "print money" to create funds. That happens in the banking system. Like for example the government can sell a bond; existing holders of statically invested dollars (foreign governments who sold stuff here, say) give the federal government a bunch of cash in exchange for the promise of interest paid over time. Now the government spends that money (on a pandemic relief bill, say), putting it into circulation among a different demographic (poorer people and not money market investors) who do different things with it (buy consumer goods). Well, now demand for those consumer goods is higher than it would have been. If you're in a pandemic trying to keep the economy afloat, that's a good thing. But if you overshoot by a bit, then there's too much money for the goods available. Inflation! Despite no money having been created; it just changed hands. Now do the same thing for a supply shock: if manufacturers scale back production (due to a pandemic) and then can't scale it back up fast enough (chip shortage!) then prices... go up! Inflation again! Likewise trade goods can create supply shocks too. Maybe some product (Russian petroleum) can't be obtained anymore. Less fuel to go around, but all the existing consumers have the same requirements and start bidding against each other for it. Yup, inflation! People who repeat this "bitcoin can't inflate because mining" idea are selling you a line, basically. And the proof is, in fact, that crypto has been basically flat vs. traditional currencies at this very moment where we're seeing global inflation. If you could ever see this effect, this would be the time to measure it. And it's not there.

deleted 5y ago

[deleted]

ajross 5y ago

> from noting that inflation is driven by “printing money” It's not. Or it can be, in the case of the linked article referencing Argentine hyperinflation. But what we're seeing right now isn't. The US government does not, as a rule, "print money" to create funds. That happens in the banking system. Like for example the government can sell a bond; existing holders of statically invested dollars (foreign governments who sold stuff here, say) give the federal government a bunch of cash in exchange for the promise of interest paid over time. Now the government spends that money (on a pandemic relief bill, say), putting it into circulation among a different demographic (poorer people and not money market investors) who do different things with it (buy consumer goods). Well, now demand for those consumer goods is higher than it would have been. If you're in a pandemic trying to keep the economy afloat, that's a good thing. But if you overshoot by a bit, then there's too much money for the goods available. Inflation! Despite no money having been created; it just changed hands. Now do the same thing for a supply shock: if manufacturers scale back production (due to a pandemic) and then can't scale it back up fast enough (chip shortage!) then prices... go up! Inflation again! Likewise trade goods can create supply shocks too. Maybe some product (Russian petroleum) can't be obtained anymore. Less fuel to go around, but all the existing consumers have the same requirements and start bidding against each other for it. Yup, inflation! People who repeat this "bitcoin can't inflate because mining" idea are selling you a line, basically. And the proof is, in fact, that crypto has been basically flat vs. traditional currencies at this very moment where we're seeing global inflation. If you could ever see this effect, this would be the time to measure it. And it's not there.