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You are right - that's the undergrad class in macroeconomics. A little more depth and you will find that it's not that black and white. A centrally-managed cur
by jonathan-adly 4y ago
You are right - that's the undergrad class in macroeconomics. A little more depth and you will find that it's not that black and white. A centrally-managed currency really has a terrible track-record everywhere in the world except maybe the US and Switzerland (emphasis on maybe). Political-pressure on the central bank, incompetence, corruption all add up to eventually break things.
You have to have a lot of institutional checks and balances and almost unshakable faith in those institutions for things to functions. That really doesn't exist in reality.
I will give you that a perfectly managed currency (with cycles of inflation and deflation) is better than a deflationary currency for economic activity. But, you have to see that no such thing exists. The US dollar central management have been reasonably good - but that's the exception, not the rule.
- JumpCrisscross 4y ago> centrally-managed currency really has a terrible track-record everywhere in the world except maybe the US and Switzerland TIL nobody uses the euro, pound, yen or renminbi.
- nradov 4y agoThe pound (GBP) had a pretty serious management failure as recently as 1992. But cryptocurrencies are obviously no better on that score. Central banks have generally abandoned the idea of pegging their fiat currencies to other fiat currencies at fixed exchange rates, so that greater flexibility should reduce the risk of management failures going forward.
- boc 4y agoI think you're confusing my use of basic. Basic here means fundamental, not surface-level. It's like saying carbon is a basic building block of life. It doesn't mean that if you dig deeper, it's actually something else. It means that carbon is where everything starts, and you go from there. I personally have a bit more than a single undergrad econ class under my belt.