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I'm not wrong at all. You can make coins with 1/4 the silver they use to, but if people don't demand more coins to make up for the debasement, there is no infla
by Rury 4y ago
I'm not wrong at all. You can make coins with 1/4 the silver they use to, but if people don't demand more coins to make up for the debasement, there is no inflation seen in traded goods. There's nothing necessarily stopping anyone from accepting the 1/4 silver coin as equivalent as the 100% silver coin for the same good. However if someone is wiser about the debasement, and now demands 4 coins instead of 1 to make up for it = there's your inflation. Like I said, inflation only happens where demand happens. Demand can be broad based, but nothing necessitates it being evenly distributed.
- arrosenberg 4y agoThat assumes people are unaware suckers and would still only be true for a short time under metallist economies (until word gets out). My entire point was that it doesn’t work that way with fiat currency. Demand is driving inflated prices, but the money isn't being debased, the supply is increasing. Congress could remove the extra cash with taxes, which you cant do with debased coins, they have to be reminted entirely.