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It is interesting how closely the proposals of Gesell are to current US Fed policy of 2% inflation. The main difference seems to be the current system runs on
by abe_m 3y ago
It is interesting how closely the proposals of Gesell are to current US Fed policy of 2% inflation.
The main difference seems to be the current system runs on the Cantillion effect, where those in favoured positions (close to where the money is created) benefit from the inflation, while those farthest away bear the cost. In effect, it is the rich who are able to borrow direct from Central Banks and Government Treasuries get negative effective interest, and are able to parlay that into charging more interest to those farther down the chain, until you hit people paying 20+% on credit cards and payday loans.
But as far as the perishable money, there are currently places like Turkey and Argentina where inflation is far higher than Gesell's proposed 5% inflation. Are those countries flourishing as a result of local inflation? It doesn't seem that way.
- latchkey 3y ago2% is an entirely made up number though. "The 2 percent target widely adopted by central banks today originated from New Zealand, and surprisingly it came not from any academic study, but rather from an offhand comment during a television interview." https://www.cfr.org/blog/history-and-future-federal-reserves-2-percent-target-rate-inflation-0 https://www.cfr.org/blog/history-and-future-federal-reserves...
- tiredofleftist 3y agoQuoting. "those in favoured positions, close to..." Add: "Investment is the production of capital goods, and the production of capital goods involves consumption." and: "Are those countries flourishing as a result of local inflation? It doesn't seem"...so ...Question I have: "This disinflation, i.e. near or almost deflation, been first contested - because some things actually became truly expensiver, but to determine inflation you did not need to calculate it as an average?", i want to ask.