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I don’t disagree that it’s not, by definition, theft. It is, however, an obscured tax on savers, a transfer of wealth from lender to debtor. At least in the US

I don’t disagree that it’s not, by definition, theft. It is, however, an obscured tax on savers, a transfer of wealth from lender to debtor. At least in the US inflation is the result of decoupling dollars from gold and the direct theft of gold and silver from the citizens by the government.

jhgb 5y ago
> a transfer of wealth from borrowers to debtors What's the difference between a borrower and a debtor?
- jonhohle 5y ago
  Sorry, s/borrower/lender
Retric 5y ago
It’s a tax on people holding the currency not all savers. Hold stock, a different currency, copper, paintings etc and you avoid losing out to US inflation.
- jonhohle 5y ago
  I’d consider equities and real property separate from savings.
  - arcticbull 5y ago
    That's the wrong way of looking at it, which is why you arrived at the wrong conclusion.
    - jonhohle 5y ago
      Savings is explicitly idle money. Illiquid holdings are very different from cash that can deployed immediately. You certainly don’t hold 100% property and by definition that unspent money is savings. Savings can certainly be used to purchase securities, commodities, property, but then it’s no longer savings and is an investment.
      - arcticbull 5y ago
        Savings is not idle money. Savings is stored value. Currency is an intentionally lossy short-term store of value designed to incentivize allocation of capital into long-term savings vehicles like stocks, bonds and real estate that are productive and help the economy. Idle cash hurts the economy. That's why even in a savings account, idle cash isn't idle, it's collateralizing loans. A savings account is more of a bond than it is currency. As such, in your model, money in a savings account is an investment - not savings. In your model the only thing that would qualify as savings would be literal dollar bills stuffed under your mattress. Liquidity is a different axis. And as for myself, I hold more than 100% of my net worth in assets, the cash in my bank account is borrowed against my asset portfolio. This is also an extremely common position for anyone with a mortgage to be in.
        jonhohle 5y ago
        Idle money is literally the definition of savings: - https://www.investopedia.com/terms/s/savings.asp https://www.investopedia.com/terms/s/savings.asp - https://www.wellsfargo.com/goals-investing/saving-vs-investing/ https://www.wellsfargo.com/goals-investing/saving-vs-investi... - https://financial-dictionary.thefreedictionary.com/saving https://financial-dictionary.thefreedictionary.com/saving I agree that fiat is intentionally lossy. I also have no problem with the idea of my idle money being, in fact, borrowed out at no risk to myself (and at recent interest rates there wouldn’t be much difference between sticking it my cushions except for the insurance provided by holding in a bank). From the saver’s perspective, it’s idle. If you are holding more than 100% of your total net worth in assets, the cash in your bank account isn’t yours, nor is anything else above that 100%. As a borrower inflation is a great way to take advantage of that position. I have mortgage debt for exactly the same reason. Mortgage debt, however, is typically net worth positive (except for 2008-2014), so I doubt most people with mortgages are leveraged higher than their net worth. In most cases market value of a house is greater than mortgage debt a few years after the loan is made.
        Retric 5y ago
        From your link: “income that is not spent on current consumption.” Income is not limited to money, you can do something and be paid in physical goods. Either indirectly by being paid in them or directly by at making them ex: canning tomatoes you grew.
imtringued 5y ago
Let's assume 50% of the population is retired and has saved money. The other 50% is working full time. A deadly virus wiped out 50% of the working population. All products are now twice as expensive. >. At least in the US inflation is the result of decoupling dollars from gold and the direct theft of gold and silver from the citizens by the government. No, it is caused by ignoring the fact that labor cannot be stored. Gold is just a token, it is like an entry in a balance sheet but harder to forge. It doesn't actually store anything other than itself. You can't store labor by turning it into gold. Gold was already in the ground and was dug out by labor. There is no way to get that labor back. People age. They can't be stored like gold. The inherent mismatch between gold and people is what causes inflation. The only difference is that due to its limited supply gold then swings back to deflation and then inflation again but simply introducing a gold standard doesn't solve the inflation problem, it is the origin of the inflation problem. Fiat currency is just a stretched gold standard. They are still tokens, they are easier to forge and more importantly fiat money doesn't age either. So inflation must still happen as a consequence. > It is, however, an obscured tax on savers, a transfer of wealth from borrowers to debtors. By this logic aging is a tax on savers. Defaulting on debt is also a tax on savers. Savers deceiving themselves is a tax on savers.
- jonhohle 5y ago
  Sure, gold can be used as a token to represent work, but it has utility beyond just that. The only way to inflate gold is by actual labor. Fiat is inflated by whim and has no value except as a store of work/time. Any hyper-inflationary story from the last 100 years makes it reasonably obvious how fiat can go to zero value while gold held from the same period has approximately the same value in trade (100oz of gold could buy you a car in 1950; 25oz of gold could do the same today, 400oz for a house vs 200 today, etc.). The US literally stole gold from the population in 1933. A $20 bill was literally a certificate for an ounce of gold. I’m not advocating a gold standard or any other monetary peg, just saying that removing a peg and moving to fiat is never in the benefit of those holding the fiat and always in the benefit of those printing. I’m not sure I follow the last sentence. Inflation requires time, so sure, aging and holding fiat results in lost value. Borrowers are on the positive side of inflation, so except for the literal tax that may be incurred by debt forgiveness the repossession of property by the lender is approximately neutral. That’s really the point of fiat currency, the printer is the borrower of real property and the note is a promise of repayment, ultimately in real property, securities, or labor.

jhgb 5y ago

> a transfer of wealth from borrowers to debtors What's the difference between a borrower and a debtor?

jonhohle 5y ago
Sorry, s/borrower/lender

Retric 5y ago

It’s a tax on people holding the currency not all savers. Hold stock, a different currency, copper, paintings etc and you avoid losing out to US inflation.

jonhohle 5y ago
I’d consider equities and real property separate from savings.
- arcticbull 5y ago
  That's the wrong way of looking at it, which is why you arrived at the wrong conclusion.
  - jonhohle 5y ago
    Savings is explicitly idle money. Illiquid holdings are very different from cash that can deployed immediately. You certainly don’t hold 100% property and by definition that unspent money is savings. Savings can certainly be used to purchase securities, commodities, property, but then it’s no longer savings and is an investment.
    - arcticbull 5y ago
      Savings is not idle money. Savings is stored value. Currency is an intentionally lossy short-term store of value designed to incentivize allocation of capital into long-term savings vehicles like stocks, bonds and real estate that are productive and help the economy. Idle cash hurts the economy. That's why even in a savings account, idle cash isn't idle, it's collateralizing loans. A savings account is more of a bond than it is currency. As such, in your model, money in a savings account is an investment - not savings. In your model the only thing that would qualify as savings would be literal dollar bills stuffed under your mattress. Liquidity is a different axis. And as for myself, I hold more than 100% of my net worth in assets, the cash in my bank account is borrowed against my asset portfolio. This is also an extremely common position for anyone with a mortgage to be in.
      - jonhohle 5y ago
        Idle money is literally the definition of savings: - https://www.investopedia.com/terms/s/savings.asp https://www.investopedia.com/terms/s/savings.asp - https://www.wellsfargo.com/goals-investing/saving-vs-investing/ https://www.wellsfargo.com/goals-investing/saving-vs-investi... - https://financial-dictionary.thefreedictionary.com/saving https://financial-dictionary.thefreedictionary.com/saving I agree that fiat is intentionally lossy. I also have no problem with the idea of my idle money being, in fact, borrowed out at no risk to myself (and at recent interest rates there wouldn’t be much difference between sticking it my cushions except for the insurance provided by holding in a bank). From the saver’s perspective, it’s idle. If you are holding more than 100% of your total net worth in assets, the cash in your bank account isn’t yours, nor is anything else above that 100%. As a borrower inflation is a great way to take advantage of that position. I have mortgage debt for exactly the same reason. Mortgage debt, however, is typically net worth positive (except for 2008-2014), so I doubt most people with mortgages are leveraged higher than their net worth. In most cases market value of a house is greater than mortgage debt a few years after the loan is made.
        Retric 5y ago
        From your link: “income that is not spent on current consumption.” Income is not limited to money, you can do something and be paid in physical goods. Either indirectly by being paid in them or directly by at making them ex: canning tomatoes you grew.

imtringued 5y ago

Let's assume 50% of the population is retired and has saved money. The other 50% is working full time. A deadly virus wiped out 50% of the working population. All products are now twice as expensive. >. At least in the US inflation is the result of decoupling dollars from gold and the direct theft of gold and silver from the citizens by the government. No, it is caused by ignoring the fact that labor cannot be stored. Gold is just a token, it is like an entry in a balance sheet but harder to forge. It doesn't actually store anything other than itself. You can't store labor by turning it into gold. Gold was already in the ground and was dug out by labor. There is no way to get that labor back. People age. They can't be stored like gold. The inherent mismatch between gold and people is what causes inflation. The only difference is that due to its limited supply gold then swings back to deflation and then inflation again but simply introducing a gold standard doesn't solve the inflation problem, it is the origin of the inflation problem. Fiat currency is just a stretched gold standard. They are still tokens, they are easier to forge and more importantly fiat money doesn't age either. So inflation must still happen as a consequence. > It is, however, an obscured tax on savers, a transfer of wealth from borrowers to debtors. By this logic aging is a tax on savers. Defaulting on debt is also a tax on savers. Savers deceiving themselves is a tax on savers.

jonhohle 5y ago
Sure, gold can be used as a token to represent work, but it has utility beyond just that. The only way to inflate gold is by actual labor. Fiat is inflated by whim and has no value except as a store of work/time. Any hyper-inflationary story from the last 100 years makes it reasonably obvious how fiat can go to zero value while gold held from the same period has approximately the same value in trade (100oz of gold could buy you a car in 1950; 25oz of gold could do the same today, 400oz for a house vs 200 today, etc.). The US literally stole gold from the population in 1933. A $20 bill was literally a certificate for an ounce of gold. I’m not advocating a gold standard or any other monetary peg, just saying that removing a peg and moving to fiat is never in the benefit of those holding the fiat and always in the benefit of those printing. I’m not sure I follow the last sentence. Inflation requires time, so sure, aging and holding fiat results in lost value. Borrowers are on the positive side of inflation, so except for the literal tax that may be incurred by debt forgiveness the repossession of property by the lender is approximately neutral. That’s really the point of fiat currency, the printer is the borrower of real property and the note is a promise of repayment, ultimately in real property, securities, or labor.