40 ms·

Exactly. And all the reasons why economists say inflation is necessary and a good thing seem to make assumptions that aren’t true if taken to their logical con

Exactly. And all the reasons why economists say inflation is necessary and a good thing seem to make assumptions that aren’t true if taken to their logical conclusion (e.g. infinite growth) and hand wave away negative consequences in order to maintain what amounts to psychologically manipulating people into not saving their money. Index all wages to inflation and we’ll see how much those holding all the assets feel about it.

greenavocado 1y ago
I agree with you. The Fed prints trillions, mortgage rates plunge, and suddenly BlackRock's buying up entire neighborhoods with cheap debt while renters get priced out. Inflation is "healthy" if you're the one holding the deeds. But tell that to the family paying 40% of their paycheck just to keep a roof over their heads while wages crawl. Or look at food prices. The USDA says inflation's "moderate," but try explaining that to the diner owner who's paying double for eggs and bacon while his customers stiff on tips on tips because their paychecks buy less. Meanwhile, Tyson Foods posts record profits, not because they're more efficient, but because they've got pricing power and a Fed that's terrified of "deflationary shocks" (corporate margins shrinking). And don't even get me started on healthcare. Hospitals jack up bills 8% a year, insurers shrug and pass it on, and the economists call it "normal." But when a nurse asks for a raise to keep up? Suddenly it's "wage-price spiral" panic. Funny how inflation's a "tool" when it's squeezing workers, but a "crisis" when it threatens profits. The game's rigged. Inflation's just the cover story. They'll print to save banks, but let Main Street eat the inflation tax. They'll cheer "record GDP" while your real paycheck buys less. And if you dare demand wages indexed to inflation? You're "unrealistic", but God forbid the bond market misses its 2% target. So yeah, inflation's not the problem. The problem is who gets the upside (asset owners) and who gets the shaft (everyone else). And until that changes, all this talk about "necessary inflation" is just a con.
- InvisibleUp 1y ago
  It’s Blackstone that’s investing in single-family homes, not BlackRock. They also only own 0.06% of US single-family housing stock. Easy mistake to make. Also, there was absolutely inflation before Bretton Woods, and significantly worse inflation at that. See, for example, the hyperinflation during Weimar Germany which led to WWII. Or the nearly 10% deflation in the US during the Great Depression, which just exacerbated the effects by severely discouraging investment that would have helped kickstart the economy again. Post-Bretton Woods, major currencies are generally substantially more stable and predictable.
  - greenavocado 1y ago
    The Weimar hyperinflation wasn't caused by gold's limitations - it was the inevitable result of political cowardice and monetary arson. After WWI, Germany made the fatal decision to abandon gold convertibility and fund reparations through the printing press, transforming the mark from 4.2 to $1 in 1914 to 4.2 trillion to $1 by 1923. This wasn't some unavoidable monetary phenomenon but a deliberate policy choice to avoid fiscal responsibility. The Great Depression tells a similar story of government malpractice rather than gold standard failure. During the Roaring Twenties, the Federal Reserve artificially suppressed interest rates, creating massive distortions in credit markets and fueling the stock bubble. When the inevitable correction came, instead of allowing the market to clear, Hoover's administration compounded the crisis through disastrous interventions - hiking interest rates during a liquidity crunch, imposing Smoot-Hawley tariffs that strangled global trade, and strong-arming businesses into maintaining unsustainably high wages. The resulting deflationary spiral wasn't gold's fault but the direct consequence of central planning arrogance. The Bretton Woods system's collapse in 1971 followed the same pattern of political expediency overriding monetary integrity. The U.S. promised dollar convertibility at $35/oz gold but only to foreign governments while banning domestic ownership. When LBJ's simultaneous Vietnam War and Great Society spending spree drained U.S. gold reserves, Nixon simply severed the dollar's last tether to reality rather than confront fiscal discipline. The post-Bretton Woods era of pure fiat has created the illusion of stability while systematically eroding purchasing power - the dollar has lost 87% of its value since 1971, with the Fed responding to every crisis by printing trillions to bail out financial elites while main street struggles under crushing inflation. Weimar, the Depression, and Bretton Woods all share the same root cause: governments refusing to accept that money must be anchored to something beyond political whims. Gold doesn't cause collapses. It reveals them. Fiat doesn't prevent crises , it merely delays them while making the eventual reckoning worse. The historical record is clear: when governments treat money as a policy tool rather than a sacred trust, the result is always catastrophe dressed in different eras' clothing. Today's $35 trillion debt and monetary debasement suggest we've learned nothing from these lessons.
    - porridgeraisin 1y ago
      Can't remember the last time I agreed with every sentence in an HN comment.
- immibis 1y ago
  Ultimately all of this comes down to currency power, which is why I personally hope one of these highly alternative web-of-trust currencies takes off and starts supplanting mainstream currency. (Any currency will end up getting corrupted too, eventually, though) The only two I remember are Circles and LedgerLoops. In Circles, each user gets their own currency not fungible with anyone else's. Payment channels are set up between each user and their immediate friends; users also allow automatic conversion between their currency and their friends' currency. Payments are routed through the trust network through a route that has capacity at each step - this is the anti-Sybil design - you always receive coins of your immediate friends' currency. Each user's coins are minted at a certain rate, and the system does accounts for the devaluation over time of each user's currency, so it's a bit like balances can be somewhat negative, and reset towards zero from either direction with time. That's obviously a complex system, and radically unlike ordinary currencies. There are many reasons it probably doesn't work; I hope they all turn out to be wrong. LedgerLoops is the other one I remember. Users post things they want to buy and things they want to sell. The system finds loops where each user gives something to the next in the loop. Apparently this is surprisingly efficient. There is no currency at all. This one, by contrast, is extremely simple, and also radically unlike ordinary currencies. This doesn't have a UBI component.

greenavocado 1y ago

I agree with you. The Fed prints trillions, mortgage rates plunge, and suddenly BlackRock's buying up entire neighborhoods with cheap debt while renters get priced out. Inflation is "healthy" if you're the one holding the deeds. But tell that to the family paying 40% of their paycheck just to keep a roof over their heads while wages crawl. Or look at food prices. The USDA says inflation's "moderate," but try explaining that to the diner owner who's paying double for eggs and bacon while his customers stiff on tips on tips because their paychecks buy less. Meanwhile, Tyson Foods posts record profits, not because they're more efficient, but because they've got pricing power and a Fed that's terrified of "deflationary shocks" (corporate margins shrinking). And don't even get me started on healthcare. Hospitals jack up bills 8% a year, insurers shrug and pass it on, and the economists call it "normal." But when a nurse asks for a raise to keep up? Suddenly it's "wage-price spiral" panic. Funny how inflation's a "tool" when it's squeezing workers, but a "crisis" when it threatens profits. The game's rigged. Inflation's just the cover story. They'll print to save banks, but let Main Street eat the inflation tax. They'll cheer "record GDP" while your real paycheck buys less. And if you dare demand wages indexed to inflation? You're "unrealistic", but God forbid the bond market misses its 2% target. So yeah, inflation's not the problem. The problem is who gets the upside (asset owners) and who gets the shaft (everyone else). And until that changes, all this talk about "necessary inflation" is just a con.

InvisibleUp 1y ago
It’s Blackstone that’s investing in single-family homes, not BlackRock. They also only own 0.06% of US single-family housing stock. Easy mistake to make. Also, there was absolutely inflation before Bretton Woods, and significantly worse inflation at that. See, for example, the hyperinflation during Weimar Germany which led to WWII. Or the nearly 10% deflation in the US during the Great Depression, which just exacerbated the effects by severely discouraging investment that would have helped kickstart the economy again. Post-Bretton Woods, major currencies are generally substantially more stable and predictable.
- greenavocado 1y ago
  The Weimar hyperinflation wasn't caused by gold's limitations - it was the inevitable result of political cowardice and monetary arson. After WWI, Germany made the fatal decision to abandon gold convertibility and fund reparations through the printing press, transforming the mark from 4.2 to $1 in 1914 to 4.2 trillion to $1 by 1923. This wasn't some unavoidable monetary phenomenon but a deliberate policy choice to avoid fiscal responsibility. The Great Depression tells a similar story of government malpractice rather than gold standard failure. During the Roaring Twenties, the Federal Reserve artificially suppressed interest rates, creating massive distortions in credit markets and fueling the stock bubble. When the inevitable correction came, instead of allowing the market to clear, Hoover's administration compounded the crisis through disastrous interventions - hiking interest rates during a liquidity crunch, imposing Smoot-Hawley tariffs that strangled global trade, and strong-arming businesses into maintaining unsustainably high wages. The resulting deflationary spiral wasn't gold's fault but the direct consequence of central planning arrogance. The Bretton Woods system's collapse in 1971 followed the same pattern of political expediency overriding monetary integrity. The U.S. promised dollar convertibility at $35/oz gold but only to foreign governments while banning domestic ownership. When LBJ's simultaneous Vietnam War and Great Society spending spree drained U.S. gold reserves, Nixon simply severed the dollar's last tether to reality rather than confront fiscal discipline. The post-Bretton Woods era of pure fiat has created the illusion of stability while systematically eroding purchasing power - the dollar has lost 87% of its value since 1971, with the Fed responding to every crisis by printing trillions to bail out financial elites while main street struggles under crushing inflation. Weimar, the Depression, and Bretton Woods all share the same root cause: governments refusing to accept that money must be anchored to something beyond political whims. Gold doesn't cause collapses. It reveals them. Fiat doesn't prevent crises , it merely delays them while making the eventual reckoning worse. The historical record is clear: when governments treat money as a policy tool rather than a sacred trust, the result is always catastrophe dressed in different eras' clothing. Today's $35 trillion debt and monetary debasement suggest we've learned nothing from these lessons.
  - porridgeraisin 1y ago
    Can't remember the last time I agreed with every sentence in an HN comment.
immibis 1y ago
Ultimately all of this comes down to currency power, which is why I personally hope one of these highly alternative web-of-trust currencies takes off and starts supplanting mainstream currency. (Any currency will end up getting corrupted too, eventually, though) The only two I remember are Circles and LedgerLoops. In Circles, each user gets their own currency not fungible with anyone else's. Payment channels are set up between each user and their immediate friends; users also allow automatic conversion between their currency and their friends' currency. Payments are routed through the trust network through a route that has capacity at each step - this is the anti-Sybil design - you always receive coins of your immediate friends' currency. Each user's coins are minted at a certain rate, and the system does accounts for the devaluation over time of each user's currency, so it's a bit like balances can be somewhat negative, and reset towards zero from either direction with time. That's obviously a complex system, and radically unlike ordinary currencies. There are many reasons it probably doesn't work; I hope they all turn out to be wrong. LedgerLoops is the other one I remember. Users post things they want to buy and things they want to sell. The system finds loops where each user gives something to the next in the loop. Apparently this is surprisingly efficient. There is no currency at all. This one, by contrast, is extremely simple, and also radically unlike ordinary currencies. This doesn't have a UBI component.