7 ms·

Another "inflation good, deflation bad" repeater robot. Opinions, meet garbage.

asdasdsddd 2y ago
No you don't get it, its totally cool to let the government unilaterally expand and contract the money supply by trillions of dollars with a single lever.
- JumpCrisscross 2y ago
  > its totally cool to let the government unilaterally expand and contract the money supply by trillions of dollars with a single lever Governments were doing that before 1971. Hell, the reason we had to give up the gold standard in '71 was we'd printed too many dollars compared to the gold. We've been trying to solve inflation for millenia. As frustrating as it sounds, we haven't found the solution. In the 19th century, British central bankers firmly on the gold standard were trying to find ways to deal with inflation, bank runs and credit crises, all amidst a burgeoning military-industrial complex and rising income inequality [1]. [1] https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_of_the_Money_Market https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...
  - matheusmoreira 2y ago
    > inflation, bank runs and credit crises The root causes of the problem are right there in your sentence. Of course the banks were facing bank runs, they literally accepted that risk when they lent out the deposited money. When people came and tried to withdraw, they didn't have the liquid funds. Coming off the gold standard just made it a little easier for the government to bail out the banks by literally printing money and giving it to them so that people can withdraw their funds. "Liquidity injection" they call it. Credit and fractional reserve banking are the true origins of inflation. A thousand dollars can baloon up into tens of thousands, even hundreds of thousands of dollars through the magic of repeatedly loaning money. You can run a money printer 24/7 and you will never inflate the money supply more than banks do with their loans. Credit is made up money. It just appears out of thin air when people get loans. It's not real until it's paid back. If too many people start defaulting on debts the whole thing comes crashing down.
    - JumpCrisscross 2y ago
      > Credit and fractional reserve banking are the creators of these problems Yes. Unfortunately, a society without credit is almost-always outcompeted by one that embraces it. We're thus stuck with managing it. Credit existed before 1971, before the Federal Reserve Act, before the signing of the Magna Carta, hell, before the Code of Hammurabi.
      - matheusmoreira 2y ago
        That's also true. Society is addicted to it. Credit doesn't just enable exponential growth, it demands it due to its compounding nature. Without it, development is too slow and economic defeat is inevitable. With it, the planet's resources are consumed unsustainably. We are damned no matter what we do.
        JumpCrisscross 2y ago
        > Credit doesn't just enable exponential growth, it demands it due to its compounding nature My cat demands my ham-and-cheese croissant, that doesn't mean he's getting it. Credit grows the money supply exponentially. Defaults and taxes cause it to go down. There is nothing that makes credit incompatible with a steady-state economy; that was, after all, about the state of human civilisation for thousands of years.
        s1artibartfast 2y ago
        Credit doesn't demand growth. It is completely viable in a steady state economy. You just need a loss elsewhere to offset it. Imagine a country with zero GDP growth. There will still be some businesses that grow on profit, and some that fail. There will be professionals that die and new professionals to take their place
        matheusmoreira 2y ago
        How could credit not demand growth? People are literally enslaved by it. They are driven to extract value from the world in order to pay back the debt plus interest. Failure to do so means losing what little they already had. Worse: people spend money to make money. Spent money ends up getting deposited right back into the bank. Which means it gets loaned out once again. The same dollar gets loaned out a potentially unbounded number of times. Banks attempt to recover lost loans by liquidating assets put up as collaterals. There are people out there who are leveraging everything they own into liquid assets they can spend. If they don't pay it back with interest, they are liquidated. They lose it all. Liquidate enough people's assets and the losses become so extensive you literally crash entire markets if not the entire the economy. Crash the US economy and the entire world might as well follow. Liquidations mean people are defaulting on their debts. Defaults mean the money which was created through loans could be lost if collaterals can't be liquidated. Banks would be in danger of being rendered insolvent were it not for government bailouts. The only difference between banks and the likes of FTX is the banks are able to get the government to erase the consequences of the failures of their risky investments.
  - logicchains 2y ago
    >We've been trying to solve inflation for millenia. As frustrating as it sounds, we haven't found the solution. America solved it in the 1800s with commodity money; the US dollar was worth as much at 1900 as it was at 1800, and there weren't any financial collapses in the 1800s comparable in magnitude to the Great Depression or Global Financial Crisis.
    - AnimalMuppet 2y ago
      > there weren't any financial collapses in the 1800s comparable in magnitude to the Great Depression or Global Financial Crisis. Oh yes there were. Go look up the Panic of 1837, Panic of 1857, Panic of 1873, and Panic of 1893.
    - JumpCrisscross 2y ago
      > America solved it in the 1800s with commodity money; the US dollar was worth as much at 1900 as it was at 1800 What? No it wasn't. The value of gold relative to commodities or industrial products wasn't stable over that interval. It would be ridiculous if it had been. Not only were we in the throes of the Industrial Revolution, the California gold rush had just started a two-century boom in the quantity of gold [1]. > there weren't any financial collapses in the 1800s comparable in magnitude to the Great Depression or Global Financial Crisis Free banking was a constant drumbeat of bank failures, inflation and scams [2][3]. (Also financial crises [4].) If you want a country that didn't have a civil war in the 19th century to go off, grab a copy of Bagehot's Lombard Street [5]. It's written by arguably the world's first modern central banker. He battles credit crises, bank runs, inflation, et cetera. All while Britain was firmly on the gold standard. [1] https://elements.visualcapitalist.com/200-years-of-global-gold-production-by-country/ https://elements.visualcapitalist.com/200-years-of-global-go... [2] https://en.wikipedia.org/wiki/History_of_central_banking_in_the_United_States#1837%E2%80%931862:_%22Free_banking%22_era https://en.wikipedia.org/wiki/History_of_central_banking_in_... [3] https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking [4] https://home.treasury.gov/about/history/freedmans-bank-building/financial-panic-of-1873 https://home.treasury.gov/about/history/freedmans-bank-build... [5] https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_of_the_Money_Market https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...
  - asdasdsddd 2y ago
    I think if we need the big bad lever, it should at least require congressional approval.
    - deleted 2y ago
      [deleted]
    - JumpCrisscross 2y ago
      > if we need the big bad lever, it should at least require congressional approval What is the big bad lever? If you're suggesting the Congress directly regulate monetary policy, one, Argentina. Two, do you remember the second-largest bank failure in the history of our republic two years ago [1]? What about the third and fourth? Would you prefer a depression every time some twat at Silicon Valley Bank forgets numbers can go down? [1] https://en.wikipedia.org/wiki/List_of_largest_bank_failures_in_the_United_States https://en.wikipedia.org/wiki/List_of_largest_bank_failures_...
      - asdasdsddd 2y ago
        Congress already manages the budget, another bomb, but year after year, they get over themselves and raise the debt ceiling, so yes I think they can handle approving changes to the amount of credit in America.
        JumpCrisscross 2y ago
        > they can handle approving changes to the amount of credit in America The Fed doesn't control the amount of credit in America. It influences it by influencing rates by controlling how many assets it owns. You want the Congress dictating buy/sell orders for Treasuries (and whatever other assets they can think of) to the Fed? At that point just go full MMT [1]. [1] https://en.wikipedia.org/wiki/Modern_monetary_theory https://en.wikipedia.org/wiki/Modern_monetary_theory
        asdasdsddd 2y ago
        I don't understand your point, the Fed is a creature of congress and its members are selected by both the legislative and the executive, but we cede enormous power by giving board members giant terms which gives them defacto independence which is insane since they have the power to make me default on my mortgage tmrw. Monetary policy is policy and all policy should go thru congress. If congress is being useless, vote them out.
- PittleyDunkin 2y ago
  Frankly we don't even need currency to begin with.

No you don't get it, its totally cool to let the government unilaterally expand and contract the money supply by trillions of dollars with a single lever.

JumpCrisscross 2y ago
> its totally cool to let the government unilaterally expand and contract the money supply by trillions of dollars with a single lever Governments were doing that before 1971. Hell, the reason we had to give up the gold standard in '71 was we'd printed too many dollars compared to the gold. We've been trying to solve inflation for millenia. As frustrating as it sounds, we haven't found the solution. In the 19th century, British central bankers firmly on the gold standard were trying to find ways to deal with inflation, bank runs and credit crises, all amidst a burgeoning military-industrial complex and rising income inequality [1]. [1] https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_of_the_Money_Market https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...
- matheusmoreira 2y ago
  > inflation, bank runs and credit crises The root causes of the problem are right there in your sentence. Of course the banks were facing bank runs, they literally accepted that risk when they lent out the deposited money. When people came and tried to withdraw, they didn't have the liquid funds. Coming off the gold standard just made it a little easier for the government to bail out the banks by literally printing money and giving it to them so that people can withdraw their funds. "Liquidity injection" they call it. Credit and fractional reserve banking are the true origins of inflation. A thousand dollars can baloon up into tens of thousands, even hundreds of thousands of dollars through the magic of repeatedly loaning money. You can run a money printer 24/7 and you will never inflate the money supply more than banks do with their loans. Credit is made up money. It just appears out of thin air when people get loans. It's not real until it's paid back. If too many people start defaulting on debts the whole thing comes crashing down.
  - JumpCrisscross 2y ago
    > Credit and fractional reserve banking are the creators of these problems Yes. Unfortunately, a society without credit is almost-always outcompeted by one that embraces it. We're thus stuck with managing it. Credit existed before 1971, before the Federal Reserve Act, before the signing of the Magna Carta, hell, before the Code of Hammurabi.
    - matheusmoreira 2y ago
      That's also true. Society is addicted to it. Credit doesn't just enable exponential growth, it demands it due to its compounding nature. Without it, development is too slow and economic defeat is inevitable. With it, the planet's resources are consumed unsustainably. We are damned no matter what we do.
      - JumpCrisscross 2y ago
        > Credit doesn't just enable exponential growth, it demands it due to its compounding nature My cat demands my ham-and-cheese croissant, that doesn't mean he's getting it. Credit grows the money supply exponentially. Defaults and taxes cause it to go down. There is nothing that makes credit incompatible with a steady-state economy; that was, after all, about the state of human civilisation for thousands of years.
      - s1artibartfast 2y ago
        Credit doesn't demand growth. It is completely viable in a steady state economy. You just need a loss elsewhere to offset it. Imagine a country with zero GDP growth. There will still be some businesses that grow on profit, and some that fail. There will be professionals that die and new professionals to take their place
        matheusmoreira 2y ago
        How could credit not demand growth? People are literally enslaved by it. They are driven to extract value from the world in order to pay back the debt plus interest. Failure to do so means losing what little they already had. Worse: people spend money to make money. Spent money ends up getting deposited right back into the bank. Which means it gets loaned out once again. The same dollar gets loaned out a potentially unbounded number of times. Banks attempt to recover lost loans by liquidating assets put up as collaterals. There are people out there who are leveraging everything they own into liquid assets they can spend. If they don't pay it back with interest, they are liquidated. They lose it all. Liquidate enough people's assets and the losses become so extensive you literally crash entire markets if not the entire the economy. Crash the US economy and the entire world might as well follow. Liquidations mean people are defaulting on their debts. Defaults mean the money which was created through loans could be lost if collaterals can't be liquidated. Banks would be in danger of being rendered insolvent were it not for government bailouts. The only difference between banks and the likes of FTX is the banks are able to get the government to erase the consequences of the failures of their risky investments.
- logicchains 2y ago
  >We've been trying to solve inflation for millenia. As frustrating as it sounds, we haven't found the solution. America solved it in the 1800s with commodity money; the US dollar was worth as much at 1900 as it was at 1800, and there weren't any financial collapses in the 1800s comparable in magnitude to the Great Depression or Global Financial Crisis.
  - AnimalMuppet 2y ago
    > there weren't any financial collapses in the 1800s comparable in magnitude to the Great Depression or Global Financial Crisis. Oh yes there were. Go look up the Panic of 1837, Panic of 1857, Panic of 1873, and Panic of 1893.
  - JumpCrisscross 2y ago
    > America solved it in the 1800s with commodity money; the US dollar was worth as much at 1900 as it was at 1800 What? No it wasn't. The value of gold relative to commodities or industrial products wasn't stable over that interval. It would be ridiculous if it had been. Not only were we in the throes of the Industrial Revolution, the California gold rush had just started a two-century boom in the quantity of gold [1]. > there weren't any financial collapses in the 1800s comparable in magnitude to the Great Depression or Global Financial Crisis Free banking was a constant drumbeat of bank failures, inflation and scams [2][3]. (Also financial crises [4].) If you want a country that didn't have a civil war in the 19th century to go off, grab a copy of Bagehot's Lombard Street [5]. It's written by arguably the world's first modern central banker. He battles credit crises, bank runs, inflation, et cetera. All while Britain was firmly on the gold standard. [1] https://elements.visualcapitalist.com/200-years-of-global-gold-production-by-country/ https://elements.visualcapitalist.com/200-years-of-global-go... [2] https://en.wikipedia.org/wiki/History_of_central_banking_in_the_United_States#1837%E2%80%931862:_%22Free_banking%22_era https://en.wikipedia.org/wiki/History_of_central_banking_in_... [3] https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking [4] https://home.treasury.gov/about/history/freedmans-bank-building/financial-panic-of-1873 https://home.treasury.gov/about/history/freedmans-bank-build... [5] https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_of_the_Money_Market https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...
- asdasdsddd 2y ago
  I think if we need the big bad lever, it should at least require congressional approval.
  - deleted 2y ago
    [deleted]
  - JumpCrisscross 2y ago
    > if we need the big bad lever, it should at least require congressional approval What is the big bad lever? If you're suggesting the Congress directly regulate monetary policy, one, Argentina. Two, do you remember the second-largest bank failure in the history of our republic two years ago [1]? What about the third and fourth? Would you prefer a depression every time some twat at Silicon Valley Bank forgets numbers can go down? [1] https://en.wikipedia.org/wiki/List_of_largest_bank_failures_in_the_United_States https://en.wikipedia.org/wiki/List_of_largest_bank_failures_...
    - asdasdsddd 2y ago
      Congress already manages the budget, another bomb, but year after year, they get over themselves and raise the debt ceiling, so yes I think they can handle approving changes to the amount of credit in America.
      - JumpCrisscross 2y ago
        > they can handle approving changes to the amount of credit in America The Fed doesn't control the amount of credit in America. It influences it by influencing rates by controlling how many assets it owns. You want the Congress dictating buy/sell orders for Treasuries (and whatever other assets they can think of) to the Fed? At that point just go full MMT [1]. [1] https://en.wikipedia.org/wiki/Modern_monetary_theory https://en.wikipedia.org/wiki/Modern_monetary_theory
        asdasdsddd 2y ago
        I don't understand your point, the Fed is a creature of congress and its members are selected by both the legislative and the executive, but we cede enormous power by giving board members giant terms which gives them defacto independence which is insane since they have the power to make me default on my mortgage tmrw. Monetary policy is policy and all policy should go thru congress. If congress is being useless, vote them out.
PittleyDunkin 2y ago
Frankly we don't even need currency to begin with.