4 ms·
> Larger amounts of money, the bank will pay you interest. Adjusted for inflation, I doubt there is a single depositor in the western world that receives a pos
by trashtester 4y ago
> Larger amounts of money, the bank will pay you interest.
Adjusted for inflation, I doubt there is a single depositor in the western world that receives a postive interest rate this year.
> Depositing money in a bank is literally loaning it to the bank, and the depositor expects a return for that. Loaning money for interest goes back to the very beginning of money.
Again, adjusted for inflation, even banks receive a negative (real) interest rate these days. The only way for them to create real profits this way, is to make sure the depositors loose more real purchaing power through their deposits and they do through their lending.
> What inflation actually is is a tax on money, and that tax revenue is collected by the party that is inflating the money (i.e. the government).
This is partially true, but oversimplified. Only if ALL the inflation is due to money printing can this be considered a tax, in that it is a transfer of purchasing power from the populace to the government. And even then, negative money (debt) get a negative "tax".
For the part of inflation that is caused by changes in supply or demand, but unrelated to money printing, the government is not benefitting from the inflation, and may even end up losing. And this is the kind of situation where inflation is needed to even out real changes in the economy.
Also, nobody is forced to store their wealth in a currency. And I actually think it is a good thing that people have an incentive to do long term storage of wealth in real assets, whether those are real estate, stocks or even commodities such as gold and silver, if you're longing for the gold standard.
The true fallacy is when people expect more from a currency than is possible. Currency is not real wealth, only some kind of representation of a debt that some anonymous other must pay in the future. A gold bar, house or a company, THAT is real wealth.