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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

by 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"?
    - simonh 4y ago
      Short term bills are serving a useful economic function and pay interest, because they are useful to people. When I was saving for a deposit on a house I kept the money in savings accounts and ISAs, again those serve a useful economic function and pay interest. The basic fact is that money is a financial instrument created and managed by a government for their own purposes. They create it and therefore obviously they control the supply of it. It's value is therefore based on the degree to which people trust that government to manage it effectively, as with a bond or equity or any other financial instrument.
      - dinom 4y ago
        Useful is in the eye of the behold... that's largely the point. No one can judge what or how "useful" something is besides the rightful owner of the asset. That includes cash (under a mattress), bonds, stocks, options, toilet paper, apples, bananas, etc. If short term bills are serving a "useful economic function" and "in-the-mattress savings" does not... then there must be some asset that serves "the most useful economic function". No? Are you suggesting to know the true intrinsic value of all assets? So, to assert that "Devaluing in-the-mattress savings is a good thing" one needs to assume that this objective way to measure value exists. Otherwise how can we [de]value things if we can't objectively valuate them? Unfortunately, since the value theory of labor fails in so many ways where the subjective theory of value does not, it's hard to see your rational as anything but an appeal to authority. Continuing a mindless appeal to authority just leads to tyranny. And therein lies the slippery slope.
- merpnderp 4y ago
  The value of a worker 50 years ago is surely far less to me today than it was to his employers back then. Yet if we had deflation his work would be worth more today than back then. Why should I value a road builder’s work today when that road has been tore up 10x over since then?
nagasadhu 4y ago
That's basically saying u can't hold on to ur hard earned money after paying taxes. Give it to the government or some pension firm. And depend on the government and incompetent regulators to take care of you in your old age.

by simonh 4y ago

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"?
  - simonh 4y ago
    Short term bills are serving a useful economic function and pay interest, because they are useful to people. When I was saving for a deposit on a house I kept the money in savings accounts and ISAs, again those serve a useful economic function and pay interest. The basic fact is that money is a financial instrument created and managed by a government for their own purposes. They create it and therefore obviously they control the supply of it. It's value is therefore based on the degree to which people trust that government to manage it effectively, as with a bond or equity or any other financial instrument.
    - dinom 4y ago
      Useful is in the eye of the behold... that's largely the point. No one can judge what or how "useful" something is besides the rightful owner of the asset. That includes cash (under a mattress), bonds, stocks, options, toilet paper, apples, bananas, etc. If short term bills are serving a "useful economic function" and "in-the-mattress savings" does not... then there must be some asset that serves "the most useful economic function". No? Are you suggesting to know the true intrinsic value of all assets? So, to assert that "Devaluing in-the-mattress savings is a good thing" one needs to assume that this objective way to measure value exists. Otherwise how can we [de]value things if we can't objectively valuate them? Unfortunately, since the value theory of labor fails in so many ways where the subjective theory of value does not, it's hard to see your rational as anything but an appeal to authority. Continuing a mindless appeal to authority just leads to tyranny. And therein lies the slippery slope.
merpnderp 4y ago
The value of a worker 50 years ago is surely far less to me today than it was to his employers back then. Yet if we had deflation his work would be worth more today than back then. Why should I value a road builder’s work today when that road has been tore up 10x over since then?

nagasadhu 4y ago

That's basically saying u can't hold on to ur hard earned money after paying taxes. Give it to the government or some pension firm. And depend on the government and incompetent regulators to take care of you in your old age.