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It doesn't stay in the drawer though. The total supply is a constraint on all actors as they compete for resource allocation. By increasing the supply and relax

It doesn't stay in the drawer though. The total supply is a constraint on all actors as they compete for resource allocation. By increasing the supply and relaxing the constraint, some participants can out compete (raise the price) of scarce resources. This is only possible to go to the levels in all areas simultaneously due to the increased supply. No increased supply to match the increased wealth from treade, you get deflation, which is desirable for savers.

neilwilson 4y ago
It has to stay in the drawer or it would disappear as the flow passed tax and repayment points. If you can see it, it is in a drawer, and therefore not inflationary. Plus anything you replace it with has the same problem. There is no magic power in interest rates to keep it in the drawer. There isn't a one-to-one relationship between money and stuff. It's more of an inductive relationship that is more like the power triangle. There is 'reactive money' as there is 'reactive power'.
- hndamien 4y ago
  Your monetary theory is that nobody spends any of the money that is created as a result of increasing the money supply? OK Paul Krugman, I'll see myself out. Bitcoin doesn't have the same problem. Monero doesn't have the same problem. The magic power of interest rates is to hide the theft of inflation by artificially increasing dollar demand from debt holders of the currency. With a hard currency, people tend to take less debt, and less risk with debt. Fortunately they also have less need to borrow because the currency appreciates in value.
  - neilwilson 4y ago
    Now that would be a straw man wouldn't it. If you have any money in your wallet or your bank account at any point in time you are not spending the money that is created as a result of the dynamic ebb and flow of the quantity of money in the system. The sum total of those people not instantly spending money when they get it is a deficit. It's just the accounting counterparty of people waiting before they spend their money. But then we're back to the famous Dijkstra quote "… our intellectual powers are rather gathered to master static relations and that our powers to visualize processes evolving in time are relatively poorly developed. For that reason we should do (as wise programmers aware of our limitations) our utmost best to shorten the conceptual gap between the static program and the dynamic process, to make the correspondence between the program (spread out in text space) and the process (spread out in time) as trivial as possible" The riff on that would be called "sound money beliefs considered harmful"

neilwilson 4y ago

It has to stay in the drawer or it would disappear as the flow passed tax and repayment points. If you can see it, it is in a drawer, and therefore not inflationary. Plus anything you replace it with has the same problem. There is no magic power in interest rates to keep it in the drawer. There isn't a one-to-one relationship between money and stuff. It's more of an inductive relationship that is more like the power triangle. There is 'reactive money' as there is 'reactive power'.

hndamien 4y ago
Your monetary theory is that nobody spends any of the money that is created as a result of increasing the money supply? OK Paul Krugman, I'll see myself out. Bitcoin doesn't have the same problem. Monero doesn't have the same problem. The magic power of interest rates is to hide the theft of inflation by artificially increasing dollar demand from debt holders of the currency. With a hard currency, people tend to take less debt, and less risk with debt. Fortunately they also have less need to borrow because the currency appreciates in value.
- neilwilson 4y ago
  Now that would be a straw man wouldn't it. If you have any money in your wallet or your bank account at any point in time you are not spending the money that is created as a result of the dynamic ebb and flow of the quantity of money in the system. The sum total of those people not instantly spending money when they get it is a deficit. It's just the accounting counterparty of people waiting before they spend their money. But then we're back to the famous Dijkstra quote "… our intellectual powers are rather gathered to master static relations and that our powers to visualize processes evolving in time are relatively poorly developed. For that reason we should do (as wise programmers aware of our limitations) our utmost best to shorten the conceptual gap between the static program and the dynamic process, to make the correspondence between the program (spread out in text space) and the process (spread out in time) as trivial as possible" The riff on that would be called "sound money beliefs considered harmful"