4 ms·

All monetary systems are built on trust. You can say the same thing about a run on traditional banks, which only have a fraction of reserves to cover deposits a

All monetary systems are built on trust. You can say the same thing about a run on traditional banks, which only have a fraction of reserves to cover deposits and would result in similar price depression.

nradov 4y ago
False. Fiat monetary systems are built on a state monopoly on violence. Trust is merely a byproduct. You are required to pay taxes in the local fiat currency, and if you fail to pay then the government will eventually seize your assets by force, or perhaps put you in jail. This is a feature, not a bug, and it generally works fairly well in practice as long as the government is at least minimally competent.
- achenet 4y ago
  This. The original purpose of money is to enable to government to quantify precisely how much of your stuff it will take each tax season.
  - namaria 4y ago
    The original purpose of money is seignorage, the difference between face value and actual value of the currency. It doesn't get better then printing hundred dollar bills that get out of circulation - almost pure profit. Taxing in kind is way better, it's inflation proof.
- Consultant32452 4y ago
  "generally works fairly well" - I agree with this, but I doubt we would agree at what it does fairly well. In the fiat systems the people with the most coins can issue themselves more coins on a whim, thereby devaluing all the other coins held by the poor. This too is a feature, not a bug, and it works really well for all the people with the most coins. They get to slowly and consistently extract wealth from the poor without having to do any work.
  - nradov 4y ago
    Poor people don't hold coins (or really any significant assets), by definition. They live paycheck to paycheck. We should find ways to increase economic mobility for poor people, but cryptocurrency isn't going to help.
    - Consultant32452 4y ago
      Do you think constantly applying downward pressure on their wages and whatever minimal savings they might acquire through inflation could have something to do with economic mobility? The Fed Chairman recently complained that workers had too much power in the market (because they were demanding higher wages) and stated openly that he was going to create policy to stop that. I really encourage you to think about what that means, and if you didn't know he said that, what it means about the places you get your news from. Why would it not be one of the biggest news stories of the year that one of the most powerful men in the world stated he was going to reduce the power of the worker?
      - nradov 4y ago
        No I don't think that moderate fiat monetary inflation has any negative impact on the economic mobility of poor people. Rather the opposite. Poor people don't really have enough savings in the first place for inflation to make a difference one way or another. Their "assets" are generally in the form of job skills and social capital, plus possibly a car or family home purchased on credit. None of those things are devalued by money printing. I don't think you've actually thought this through at all and you don't understand even the basics of how it really works.
        Consultant32452 4y ago
        When the money printer prints, the people who touch the money first get to spend it before inflation fully comes to fruition. They use that money to scoop up and raise the costs of assets, which the poor never get to slowly accumulate. Meanwhile, wages always lag price inflation, and wages haven't kept up with inflation for the last 40+ years. Inflation is a slow, exponential wealth transfer that happens a little bit every year. You also didn't address my specific question about fed policy when the Chairman himself said he was going to tip the balance of power away from workers. Do you believe the fed chairman doesn't understand economics?

nradov 4y ago

False. Fiat monetary systems are built on a state monopoly on violence. Trust is merely a byproduct. You are required to pay taxes in the local fiat currency, and if you fail to pay then the government will eventually seize your assets by force, or perhaps put you in jail. This is a feature, not a bug, and it generally works fairly well in practice as long as the government is at least minimally competent.

achenet 4y ago
This. The original purpose of money is to enable to government to quantify precisely how much of your stuff it will take each tax season.
- namaria 4y ago
  The original purpose of money is seignorage, the difference between face value and actual value of the currency. It doesn't get better then printing hundred dollar bills that get out of circulation - almost pure profit. Taxing in kind is way better, it's inflation proof.
Consultant32452 4y ago
"generally works fairly well" - I agree with this, but I doubt we would agree at what it does fairly well. In the fiat systems the people with the most coins can issue themselves more coins on a whim, thereby devaluing all the other coins held by the poor. This too is a feature, not a bug, and it works really well for all the people with the most coins. They get to slowly and consistently extract wealth from the poor without having to do any work.
- nradov 4y ago
  Poor people don't hold coins (or really any significant assets), by definition. They live paycheck to paycheck. We should find ways to increase economic mobility for poor people, but cryptocurrency isn't going to help.
  - Consultant32452 4y ago
    Do you think constantly applying downward pressure on their wages and whatever minimal savings they might acquire through inflation could have something to do with economic mobility? The Fed Chairman recently complained that workers had too much power in the market (because they were demanding higher wages) and stated openly that he was going to create policy to stop that. I really encourage you to think about what that means, and if you didn't know he said that, what it means about the places you get your news from. Why would it not be one of the biggest news stories of the year that one of the most powerful men in the world stated he was going to reduce the power of the worker?
    - nradov 4y ago
      No I don't think that moderate fiat monetary inflation has any negative impact on the economic mobility of poor people. Rather the opposite. Poor people don't really have enough savings in the first place for inflation to make a difference one way or another. Their "assets" are generally in the form of job skills and social capital, plus possibly a car or family home purchased on credit. None of those things are devalued by money printing. I don't think you've actually thought this through at all and you don't understand even the basics of how it really works.
      - Consultant32452 4y ago
        When the money printer prints, the people who touch the money first get to spend it before inflation fully comes to fruition. They use that money to scoop up and raise the costs of assets, which the poor never get to slowly accumulate. Meanwhile, wages always lag price inflation, and wages haven't kept up with inflation for the last 40+ years. Inflation is a slow, exponential wealth transfer that happens a little bit every year. You also didn't address my specific question about fed policy when the Chairman himself said he was going to tip the balance of power away from workers. Do you believe the fed chairman doesn't understand economics?