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Money printers bad. Including the Federal Reserve (since its inception 109 years ago, the US Dollar has lost 96% of its value.) There is an argument that defla

by mouse_ 4y ago

Money printers bad. Including the Federal Reserve (since its inception 109 years ago, the US Dollar has lost 96% of its value.) There is an argument that deflationary currencies are bad because people will not want to spend them as they accrue value, but that value has to go somewhere; either stays in your pocket with deflationary currency or goes to some billionaire's fourth yacht's heated seats with inflationary.

wpietri 4y ago
The Federal Reserve has done a pretty good job on inflation in recent decades: https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi https://www.macrotrends.net/countries/USA/united-states/infl... The 1970s were bad, but we had a 40-year period of low, stable inflation, which is the goal. Now's not great, but it's not the Federal Reserve's fault; between a global plague, supply chain disruption, and a land war in Europe, inflation is up across the globe: https://tradingeconomics.com/country-list/inflation-rate https://tradingeconomics.com/country-list/inflation-rate Compare that to the economic chaos that was much more common before the rise of strong central banks and I'd say "Federal Reserve baaaaad" is somewhat lacking in nuance.
- bottlepalm 4y ago
  Global plague nope, supply chain disruption nope, a land war in Europe nope. Printing 13 trillion dollars for corona stimulus, yep. Though I guess that's more the fault of the legislature than anyone else.
  - mouse_ 4y ago
    +1
  - WinstonSmith84 4y ago
    Yeah ... But I think he must have been sarcastic with "The Federal Reserve has done a pretty good job on inflation". The FED can't be totally blamed, respective governments share a big part of the incompetency
- mouse_ 4y ago
  In those times of economic chaos, a working class individual could afford a house and food for his family.
  - ansible 4y ago
    > In those times of economic chaos, a working class individual could afford a house and food for his family. Should that really be a surprise when we see the growing disparity in income between the average worker and the CEOs? The rich have been keeping a greater and greater percentage of corporate profits for themselves. And it now isn't being siphoned off by the government because the rich have also lobbied to have the top-income tax rates lowered and lowered.
  - wpietri 4y ago
    They're not wizards. Their job is to manage monetary policy, and I think they do a decent job of it.
matkoniecz 4y ago
> since its inception 109 years ago, the US Dollar has lost 96% of its value I bet that 109 years after Bitcoin/ETH/FTX/Dogecoin/etc will be created they will fare far worse.
- ansible 4y ago
  > ... Dogecoin ... I remember when this blockchain was created. People were transferring Doge to each other for fun. That was the whole point, it was just goofing around and making jokes. And now you can buy it at ATMs in gas stations. What a world we live in.
- mouse_ 4y ago
  Sure. Is that the standard we want to be comparing to, though?
  - matkoniecz 4y ago
    Note that I am not the person who started this comparison. I also would not store value long term in dollars anyway - I would care more about other things. Where cryptocurrencies are even worse when compared to dollars.
ansible 4y ago
> Money printers bad. Including the Federal Reserve (since its inception 109 years ago, the US Dollar has lost 96% of its value.) You don't seem to understand how fiat money is supposed to work, and how a stable economy is supposed to function. Deflation is bad (where the value of a dollar increases relative to the average cost of products). Your economy can enter a deflationary spiral which is super bad and disruptive. So ideally you would have a stable value relative to products and services. But how do you deal with progress and productivity increases? A farmer 100 years ago was plowing fields with a horse, and now can handle much larger farms with a tractor. We're producing a lot more of other resources and finished goods as well, and these are purchased by a much larger population. Well, you increase the money supply to match the economic activity. Keeping inflation to exactly 0% is very difficult, and erring on the side of inflation isn't so bad, so that's what we try to do. The point isn't to have each dollar stored in a bank to automatically (magically) increase in relative value (to products and services) without any effort. If you want more money, you need to make more money.
- mouse_ 4y ago
  In a deflationary spiral, both unemployment and the cost of goods go down. It is considered a time of prosperity for the layman. Any worldview in which this is a bad thing can only be considered an evil one. Sure, inflation is cool because it shrinks our debt to nothing, but then what is our economy and social structure based on? Only lies. Even children can see now how this system is collapsing under the weight of its own absurdity and demoralization. I've had it to here with these banker-centric rationalizations of why it's a good thing that the average employee gets screwed harder and harder each year.
  - kemotep 4y ago
    Can you please provide evidence to your claim that deflation leads to lower prices and unemployment? That is a claim that contradicts most modern understandings of economics. The last major deflationary event in the United States was the Great Recession and personally that seems a little out of touch to be calling that a time of prosperity for the layman.

by mouse_ 4y ago

wpietri 4y ago

The Federal Reserve has done a pretty good job on inflation in recent decades: https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi https://www.macrotrends.net/countries/USA/united-states/infl... The 1970s were bad, but we had a 40-year period of low, stable inflation, which is the goal. Now's not great, but it's not the Federal Reserve's fault; between a global plague, supply chain disruption, and a land war in Europe, inflation is up across the globe: https://tradingeconomics.com/country-list/inflation-rate https://tradingeconomics.com/country-list/inflation-rate Compare that to the economic chaos that was much more common before the rise of strong central banks and I'd say "Federal Reserve baaaaad" is somewhat lacking in nuance.

bottlepalm 4y ago
Global plague nope, supply chain disruption nope, a land war in Europe nope. Printing 13 trillion dollars for corona stimulus, yep. Though I guess that's more the fault of the legislature than anyone else.
- mouse_ 4y ago
  +1
- WinstonSmith84 4y ago
  Yeah ... But I think he must have been sarcastic with "The Federal Reserve has done a pretty good job on inflation". The FED can't be totally blamed, respective governments share a big part of the incompetency
mouse_ 4y ago
In those times of economic chaos, a working class individual could afford a house and food for his family.
- ansible 4y ago
  > In those times of economic chaos, a working class individual could afford a house and food for his family. Should that really be a surprise when we see the growing disparity in income between the average worker and the CEOs? The rich have been keeping a greater and greater percentage of corporate profits for themselves. And it now isn't being siphoned off by the government because the rich have also lobbied to have the top-income tax rates lowered and lowered.
- wpietri 4y ago
  They're not wizards. Their job is to manage monetary policy, and I think they do a decent job of it.

matkoniecz 4y ago

> since its inception 109 years ago, the US Dollar has lost 96% of its value I bet that 109 years after Bitcoin/ETH/FTX/Dogecoin/etc will be created they will fare far worse.

ansible 4y ago
> ... Dogecoin ... I remember when this blockchain was created. People were transferring Doge to each other for fun. That was the whole point, it was just goofing around and making jokes. And now you can buy it at ATMs in gas stations. What a world we live in.
mouse_ 4y ago
Sure. Is that the standard we want to be comparing to, though?
- matkoniecz 4y ago
  Note that I am not the person who started this comparison. I also would not store value long term in dollars anyway - I would care more about other things. Where cryptocurrencies are even worse when compared to dollars.

ansible 4y ago

> Money printers bad. Including the Federal Reserve (since its inception 109 years ago, the US Dollar has lost 96% of its value.) You don't seem to understand how fiat money is supposed to work, and how a stable economy is supposed to function. Deflation is bad (where the value of a dollar increases relative to the average cost of products). Your economy can enter a deflationary spiral which is super bad and disruptive. So ideally you would have a stable value relative to products and services. But how do you deal with progress and productivity increases? A farmer 100 years ago was plowing fields with a horse, and now can handle much larger farms with a tractor. We're producing a lot more of other resources and finished goods as well, and these are purchased by a much larger population. Well, you increase the money supply to match the economic activity. Keeping inflation to exactly 0% is very difficult, and erring on the side of inflation isn't so bad, so that's what we try to do. The point isn't to have each dollar stored in a bank to automatically (magically) increase in relative value (to products and services) without any effort. If you want more money, you need to make more money.

mouse_ 4y ago
In a deflationary spiral, both unemployment and the cost of goods go down. It is considered a time of prosperity for the layman. Any worldview in which this is a bad thing can only be considered an evil one. Sure, inflation is cool because it shrinks our debt to nothing, but then what is our economy and social structure based on? Only lies. Even children can see now how this system is collapsing under the weight of its own absurdity and demoralization. I've had it to here with these banker-centric rationalizations of why it's a good thing that the average employee gets screwed harder and harder each year.
- kemotep 4y ago
  Can you please provide evidence to your claim that deflation leads to lower prices and unemployment? That is a claim that contradicts most modern understandings of economics. The last major deflationary event in the United States was the Great Recession and personally that seems a little out of touch to be calling that a time of prosperity for the layman.