4 ms·

huh? emperors regularly debased the currency; that’s inflation by another name. same effect

User23 3y ago
No, no it's not. It's not hard to understand why the emperor minting a 40% gold aureus isn't going to reduce the value of my hoard of 80% gold aurei. On the other hand, a fiat currency issuer doubling the money supply can (not necessarily will![1]) indeed reduce the value of any fiat I hold. And incidentally coin debasement in the late Empire was largely due to the empire's economy and thus need for currency growing and exceeding the available supply of precious metals. If only they'd had double-entry bookkeeping... [1] This is because money can't cause inflation, ie drive up prices, unless it's actually used to bid them up.
- cobbzilla 3y ago
  the debasement was specifically so they could “print their way out of debt” — the effect is the same as with a fiat currency, “more dollars chasing the same quantity of goods” is a somewhat canonical definition of inflation and applies in both situations.
  - User23 3y ago
    I’m afraid you’re being intentionally obtuse. I already gave one example of how debasing coinage is a different operation than issuing more IOUs, with considerably different consequences for participants in the respective systems, and your only response is a libertarian platitude about printing money and a statement about fiat that isn't particularly germane. There has been a historical case of actual monetary inflation in a commodity based currency system and that was in Spain. The treasure fleets brought back so much gold that there really was too much money chasing too few goods and services. It should be obvious that that kind of inflation is operationally a very different thing than currency debasement and much closer to issuing new fiat.
    - cobbzilla 3y ago
      Sorry I’m not going to argue basic economics. If that’s too obtuse that tells me all I need to know. Good luck.

No, no it's not. It's not hard to understand why the emperor minting a 40% gold aureus isn't going to reduce the value of my hoard of 80% gold aurei. On the other hand, a fiat currency issuer doubling the money supply can (not necessarily will![1]) indeed reduce the value of any fiat I hold. And incidentally coin debasement in the late Empire was largely due to the empire's economy and thus need for currency growing and exceeding the available supply of precious metals. If only they'd had double-entry bookkeeping... [1] This is because money can't cause inflation, ie drive up prices, unless it's actually used to bid them up.

cobbzilla 3y ago
the debasement was specifically so they could “print their way out of debt” — the effect is the same as with a fiat currency, “more dollars chasing the same quantity of goods” is a somewhat canonical definition of inflation and applies in both situations.
- User23 3y ago
  I’m afraid you’re being intentionally obtuse. I already gave one example of how debasing coinage is a different operation than issuing more IOUs, with considerably different consequences for participants in the respective systems, and your only response is a libertarian platitude about printing money and a statement about fiat that isn't particularly germane. There has been a historical case of actual monetary inflation in a commodity based currency system and that was in Spain. The treasure fleets brought back so much gold that there really was too much money chasing too few goods and services. It should be obvious that that kind of inflation is operationally a very different thing than currency debasement and much closer to issuing new fiat.
  - cobbzilla 3y ago
    Sorry I’m not going to argue basic economics. If that’s too obtuse that tells me all I need to know. Good luck.