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>The governments of all countries 'print' new money at a steady rate Central bank != government in most developed countries >so long as all currencies inflate

>The governments of all countries 'print' new money at a steady rate Central bank != government in most developed countries >so long as all currencies inflate at a similar rate; the foreign exchange rates will be stable. Exchange rates are not stable for a variety of reasons that are not purely supply-related

_factor 2y ago
Exchange rates used to be pegged to labor. The futures market obfuscated that and is controlled by a central bank through government issued subsidies which cause food surpluses which “should” reduce the price of produce.. if not for the manipulated futures market. I’m sure population density is a variable in this equation as well, I just can’t figure out where to pin it.
- JumpCrisscross 2y ago
  > Exchange rates used to be pegged to labor When?! > futures market obfuscated that and is controlled by a central bank Where? FX trading in open capital account economies are between lightly and unregulated. > sure population density is a variable in this equation as well Total factor productivity [1]. [1] https://en.m.wikipedia.org/wiki/Total_factor_productivity https://en.m.wikipedia.org/wiki/Total_factor_productivity
  - _factor 2y ago
    > When?! Diplomatic agreements between nations throughout history. Your land has water, mine has food, we set the value of trade and baseline the currency. The unavoidable cost is the minimum time and labor to transport and extract the resources. The supply and demand indirectly adjust the transaction prices through multiple layers of exchange. Hence the border tariffs having an impact on exchange rate. Simplified, but draws a picture.
cryptica 2y ago
> Central bank != government in most developed countries If the government can keep issuing more bonds, essentially any time it wants, and it knows that the central bank will always be there and can use its infinite money supply to buy all of the bonds which the government chooses to create, then we can safely say that there is no meaningful distinction between the government and its central bank from the perspective of citizens. From their perspective, it's just new money coming out of a big state-controlled money printer. > Exchange rates are not stable for a variety of reasons that are not purely supply-related Yes but it's a fact that all countries aim to keep inflation at around the 2% to 3% mark. If a country just stopped printing money and backed it with gold (for example), then that country's currency would almost inevitably go up in the long run. Consider that the US dollar has lost 90% of its value in the last 50 years or so to inflation. This would show up on the forex charts as a sustained, upward trend if any country did this. Just look at fixed-supply cryptocurrencies like BitCoin and DogeCoin if you need more proof of this effect... I hope we don't need to make the argument that DogeCoin succeeded on the basis of its economic efficiency... Using the electricity of an entire country to process a mere 4 transactions per second... It would seem that the fixed supply of DogeCoins and BitCoins contributed to massive price increase in spite of economic inefficiency. BTW, didn't Gaddafi of Libya try to introduce a Gold Dinar currency? I'm sure this bears no connection to what NATO did to him after. Did any country manage to abandon their national fiat system without its leaders being assassinated or overthrown in a violent coup? Kind of suspicious. Name one country on earth which isn't on the same inflationary fiat monetary standard. Most have a central bank and work much the same way, those which don't just use some other country's fiat... Some countries aren't shy about going the hyperinflation route... but no country will dare try the deflationary route. Why? Why is it that only decentralized currencies without leaders were able to achieve this?
- JumpCrisscross 2y ago
  > it's a fact that all countries aim to keep inflation at around the 2% to 3% mark False [1][2][3]. > didn't Gaddafi of Libya try to introduce a Gold Dinar currency He also began using every other currency than dollars. That’s how rebalancing works. > Did any country manage to abandon their national fiat system without its leaders being assassinated or overthrown in a violent coup? Kind of suspicious Pegged currencies and currency boards exist. Also, what are you thinking of? Because we haven’t had a working economy with a fixed-supply currency since the Industrial Revolution, for obvious reasons. > no country will dare try the deflationary route. Why? Did you miss the Euro crisis? Austerity is forced deflation. > Why is it that only decentralized currencies without leaders were able to achieve this? Straw man. Every time crypto crashes, they’re hyperinflationary in real terms. [1] https://indianexpress.com/article/business/economy/rbi-targets-inflation-at-4-for-sustainable-economic-growth-9152006/ https://indianexpress.com/article/business/economy/rbi-targe... [2] https://www.ceicdata.com/en/argentina/consumer-price-index-inflation-target/central-bank-of-argentina-inflation-target https://www.ceicdata.com/en/argentina/consumer-price-index-i... [3] https://www.reuters.com/world/middle-east/turkey-inflation-hit-685-ahead-election-blow-ruling-party-2024-04-03/ https://www.reuters.com/world/middle-east/turkey-inflation-h...
dataflow 2y ago
> Central bank != government in most developed countries And this negates their conclusion how? To a layman it reads like a distinction without a difference.
- JumpCrisscross 2y ago
  > this negates their conclusion how? To a layman it reads like a distinction without a difference You’re correct. It’s not generalisable to countries without an independent central bank. (And the U.S. Treasury absolutely mints coin.)

_factor 2y ago

Exchange rates used to be pegged to labor. The futures market obfuscated that and is controlled by a central bank through government issued subsidies which cause food surpluses which “should” reduce the price of produce.. if not for the manipulated futures market. I’m sure population density is a variable in this equation as well, I just can’t figure out where to pin it.

JumpCrisscross 2y ago
> Exchange rates used to be pegged to labor When?! > futures market obfuscated that and is controlled by a central bank Where? FX trading in open capital account economies are between lightly and unregulated. > sure population density is a variable in this equation as well Total factor productivity [1]. [1] https://en.m.wikipedia.org/wiki/Total_factor_productivity https://en.m.wikipedia.org/wiki/Total_factor_productivity
- _factor 2y ago
  > When?! Diplomatic agreements between nations throughout history. Your land has water, mine has food, we set the value of trade and baseline the currency. The unavoidable cost is the minimum time and labor to transport and extract the resources. The supply and demand indirectly adjust the transaction prices through multiple layers of exchange. Hence the border tariffs having an impact on exchange rate. Simplified, but draws a picture.

cryptica 2y ago

> Central bank != government in most developed countries If the government can keep issuing more bonds, essentially any time it wants, and it knows that the central bank will always be there and can use its infinite money supply to buy all of the bonds which the government chooses to create, then we can safely say that there is no meaningful distinction between the government and its central bank from the perspective of citizens. From their perspective, it's just new money coming out of a big state-controlled money printer. > Exchange rates are not stable for a variety of reasons that are not purely supply-related Yes but it's a fact that all countries aim to keep inflation at around the 2% to 3% mark. If a country just stopped printing money and backed it with gold (for example), then that country's currency would almost inevitably go up in the long run. Consider that the US dollar has lost 90% of its value in the last 50 years or so to inflation. This would show up on the forex charts as a sustained, upward trend if any country did this. Just look at fixed-supply cryptocurrencies like BitCoin and DogeCoin if you need more proof of this effect... I hope we don't need to make the argument that DogeCoin succeeded on the basis of its economic efficiency... Using the electricity of an entire country to process a mere 4 transactions per second... It would seem that the fixed supply of DogeCoins and BitCoins contributed to massive price increase in spite of economic inefficiency. BTW, didn't Gaddafi of Libya try to introduce a Gold Dinar currency? I'm sure this bears no connection to what NATO did to him after. Did any country manage to abandon their national fiat system without its leaders being assassinated or overthrown in a violent coup? Kind of suspicious. Name one country on earth which isn't on the same inflationary fiat monetary standard. Most have a central bank and work much the same way, those which don't just use some other country's fiat... Some countries aren't shy about going the hyperinflation route... but no country will dare try the deflationary route. Why? Why is it that only decentralized currencies without leaders were able to achieve this?

JumpCrisscross 2y ago
> it's a fact that all countries aim to keep inflation at around the 2% to 3% mark False [1][2][3]. > didn't Gaddafi of Libya try to introduce a Gold Dinar currency He also began using every other currency than dollars. That’s how rebalancing works. > Did any country manage to abandon their national fiat system without its leaders being assassinated or overthrown in a violent coup? Kind of suspicious Pegged currencies and currency boards exist. Also, what are you thinking of? Because we haven’t had a working economy with a fixed-supply currency since the Industrial Revolution, for obvious reasons. > no country will dare try the deflationary route. Why? Did you miss the Euro crisis? Austerity is forced deflation. > Why is it that only decentralized currencies without leaders were able to achieve this? Straw man. Every time crypto crashes, they’re hyperinflationary in real terms. [1] https://indianexpress.com/article/business/economy/rbi-targets-inflation-at-4-for-sustainable-economic-growth-9152006/ https://indianexpress.com/article/business/economy/rbi-targe... [2] https://www.ceicdata.com/en/argentina/consumer-price-index-inflation-target/central-bank-of-argentina-inflation-target https://www.ceicdata.com/en/argentina/consumer-price-index-i... [3] https://www.reuters.com/world/middle-east/turkey-inflation-hit-685-ahead-election-blow-ruling-party-2024-04-03/ https://www.reuters.com/world/middle-east/turkey-inflation-h...

dataflow 2y ago

> Central bank != government in most developed countries And this negates their conclusion how? To a layman it reads like a distinction without a difference.

JumpCrisscross 2y ago
> this negates their conclusion how? To a layman it reads like a distinction without a difference You’re correct. It’s not generalisable to countries without an independent central bank. (And the U.S. Treasury absolutely mints coin.)