5 ms·

> the value of each coupon becomes more, not less, over time Deflation has historically been a bad thing every time it's happened.

by klipt 4y ago

ibeckermayer 4y ago
Nonsense. Sure, deflationary shocks can be calamitous, like the Great Depression or the GFC. But steady deflation over time is logically the natural and good outcome of improvement over time—as technology advances and we get better at producing things, they should get cheaper, on average. Instead, our savings are buying us LESS over time, so that government can buy votes, fund wars, bail out defense contractors, pharma companies, financial institutions, and other cronies, etc. Inflation via the printing press, which is now just considered by many a normal phenomenon, is actually legalized wealth transfer from the savings of ordinary citizens into the coffers of giant government bureaucracies and the large corporations that feed off them.
- mrow84 4y ago
  Goods getting cheaper broadly means that supply is going up relative to demand - we call this deflation. If the supply of money goes up relative to demand then we call that inflation. It seems like you are conflating the two categories.
- simonh 4y ago
  Devaluing in-the-mattress savings is a good thing, hence all the many government schemes to incentivise small scale productive investment. Here in the UK that's through tax free consumer savings accounts like ISAs, but also pensions. Savings that are invested do work in the economy fund businesses, promote economic activity and aid job and wealth creation. Stuffed mattresses are a boat anchor on the economy. Having said that, deflation isn't always the awful spectre of doom it's sometimes made out do be, especially if it's due to technological improvements or increased supply. As the article we're all notionally discussing explains, inflation in a reasonably well managed economy is generally differential and reflects shifts in the structure of the economy.
  - dinom 4y ago
    Lol, here: https://news.ycombinator.com/item?id=31539114 https://news.ycombinator.com/item?id=31539114 you say "I don’t want to devalue their savings" yet above you say "Devaluing in-the-mattress savings is a good thing". Either your thinking has changed or, you're trying to cause confusion or, maybe confused yourself, or are trolling. At this point I suspect I may even be chatting with an ELIZA... so what else is there for me to say? Think whatever you want. ¯\_(ツ)_/¯
  - dinom 4y ago
    What is "in-the-mattress" savings exactly... besides one person's savings that another wants to spend differently? Who should be the ultimate judge of how capital is saved and invested? You? The government? What about the person who actually did the saving? Taken to it's logical conclusion, saying that "devaluing in-the-mattress savings is a good thing" sounds a lot like "let's soak the rich" to me.... and it's a very slippery road to serfdom.
    - simonh 4y ago
      In-the-matress savings are money that is not invested, such as cash stuffed in a matress. This is the opposite of soaking the rich. The well-off generally have a very large proportion of their wealth invested in productive economic activities, with returns well above inflation.
      - dinom 4y ago
        You haven't convinced me. After all... what about short-term bills? Are they considered savings or investment? What about FX accounts? What about operating capital? In other words... what is "not invested"? An axiomatic definition is imperative... not turtles all the way down. Savings and investment are largely synonymous so I stand by my initial statement. How can one expect to buy a house if they're precluded from putting savings "in-the-mattress"? I'm not suggesting they'd be better or worse off using leverage... I'm saying it is solely for them to determine since they're the ones who are most familiar with their own circumstances. If someone enjoys wiping their rear with $100 bills that's up to them. As I can tell, the best definition for "in-the-mattress savings" is capital that is deemed a bad investment by any/every one except the person who managed to create the savings itself. Your argument leads to a slippery slope... what would stop me from taking your assets because they don't fit my definition of "investment"?
someguydave 4y ago
Yeah that decreasing price for silicon chips over the past decades has been a real disaster.
- actionablefiber 4y ago
  There's a difference between decreases in the price of specific goods that comes about due to technology, and deflation that comes about due to monetary policy. That I can think of, the obvious difference is that the second one almost definitionally means a steady decrease in nominal wages. This seems like a perverse incentive - if I sock away my first paycheck flipping burgers under my mattress and do nothing with it for 50 years, a deflationary regime means I can take it back out and buy a lot more with it than someone with their first paycheck flipping burgers today.
  - someguydave 4y ago
    > the obvious difference is that the second one almost definitionally People said similar stuff about negative interest rates, yet they were rolled out and kind of worked around the world. I'm not buying this defense of inflationism.
    - actionablefiber 4y ago
      The prevailing consensus is that interest rates and inflation are inversely correlated, so "negative interest rates worked out fine" isn't a rebuttal to that.
  - ekianjo 4y ago
    > if I sock away my first paycheck flipping burgers under my mattress and do nothing with it for 50 years, a deflationary regime means I can take it back out and buy a lot more with it than someone with their first paycheck flipping burgers today. Thats still true with inflation too. No idea what your point is.
    - actionablefiber 4y ago
ekianjo 4y ago
Says every governement that promotes inflation. Funny hey?

> the value of each coupon becomes more, not less, over time Deflation has historically been a bad thing every time it's happened.

by klipt 4y ago

> the value of each coupon becomes more, not less, over time Deflation has historically been a bad thing every time it's happened.

ibeckermayer 4y ago

Nonsense. Sure, deflationary shocks can be calamitous, like the Great Depression or the GFC. But steady deflation over time is logically the natural and good outcome of improvement over time—as technology advances and we get better at producing things, they should get cheaper, on average. Instead, our savings are buying us LESS over time, so that government can buy votes, fund wars, bail out defense contractors, pharma companies, financial institutions, and other cronies, etc. Inflation via the printing press, which is now just considered by many a normal phenomenon, is actually legalized wealth transfer from the savings of ordinary citizens into the coffers of giant government bureaucracies and the large corporations that feed off them.

mrow84 4y ago
Goods getting cheaper broadly means that supply is going up relative to demand - we call this deflation. If the supply of money goes up relative to demand then we call that inflation. It seems like you are conflating the two categories.
simonh 4y ago
Devaluing in-the-mattress savings is a good thing, hence all the many government schemes to incentivise small scale productive investment. Here in the UK that's through tax free consumer savings accounts like ISAs, but also pensions. Savings that are invested do work in the economy fund businesses, promote economic activity and aid job and wealth creation. Stuffed mattresses are a boat anchor on the economy. Having said that, deflation isn't always the awful spectre of doom it's sometimes made out do be, especially if it's due to technological improvements or increased supply. As the article we're all notionally discussing explains, inflation in a reasonably well managed economy is generally differential and reflects shifts in the structure of the economy.
- dinom 4y ago
  Lol, here: https://news.ycombinator.com/item?id=31539114 https://news.ycombinator.com/item?id=31539114 you say "I don’t want to devalue their savings" yet above you say "Devaluing in-the-mattress savings is a good thing". Either your thinking has changed or, you're trying to cause confusion or, maybe confused yourself, or are trolling. At this point I suspect I may even be chatting with an ELIZA... so what else is there for me to say? Think whatever you want. ¯\_(ツ)_/¯
- dinom 4y ago
  What is "in-the-mattress" savings exactly... besides one person's savings that another wants to spend differently? Who should be the ultimate judge of how capital is saved and invested? You? The government? What about the person who actually did the saving? Taken to it's logical conclusion, saying that "devaluing in-the-mattress savings is a good thing" sounds a lot like "let's soak the rich" to me.... and it's a very slippery road to serfdom.
  - simonh 4y ago
    In-the-matress savings are money that is not invested, such as cash stuffed in a matress. This is the opposite of soaking the rich. The well-off generally have a very large proportion of their wealth invested in productive economic activities, with returns well above inflation.
    - dinom 4y ago
      You haven't convinced me. After all... what about short-term bills? Are they considered savings or investment? What about FX accounts? What about operating capital? In other words... what is "not invested"? An axiomatic definition is imperative... not turtles all the way down. Savings and investment are largely synonymous so I stand by my initial statement. How can one expect to buy a house if they're precluded from putting savings "in-the-mattress"? I'm not suggesting they'd be better or worse off using leverage... I'm saying it is solely for them to determine since they're the ones who are most familiar with their own circumstances. If someone enjoys wiping their rear with $100 bills that's up to them. As I can tell, the best definition for "in-the-mattress savings" is capital that is deemed a bad investment by any/every one except the person who managed to create the savings itself. Your argument leads to a slippery slope... what would stop me from taking your assets because they don't fit my definition of "investment"?

someguydave 4y ago

Yeah that decreasing price for silicon chips over the past decades has been a real disaster.

actionablefiber 4y ago
There's a difference between decreases in the price of specific goods that comes about due to technology, and deflation that comes about due to monetary policy. That I can think of, the obvious difference is that the second one almost definitionally means a steady decrease in nominal wages. This seems like a perverse incentive - if I sock away my first paycheck flipping burgers under my mattress and do nothing with it for 50 years, a deflationary regime means I can take it back out and buy a lot more with it than someone with their first paycheck flipping burgers today.
- someguydave 4y ago
  > the obvious difference is that the second one almost definitionally People said similar stuff about negative interest rates, yet they were rolled out and kind of worked around the world. I'm not buying this defense of inflationism.
  - actionablefiber 4y ago
    The prevailing consensus is that interest rates and inflation are inversely correlated, so "negative interest rates worked out fine" isn't a rebuttal to that.
- ekianjo 4y ago
  > if I sock away my first paycheck flipping burgers under my mattress and do nothing with it for 50 years, a deflationary regime means I can take it back out and buy a lot more with it than someone with their first paycheck flipping burgers today. Thats still true with inflation too. No idea what your point is.
  - actionablefiber 4y ago

ekianjo 4y ago

Says every governement that promotes inflation. Funny hey?