3 ms·

>> Right. Governments print money all the time, but the total value of all the money remains constant, thanks to inflation. It's just a measure of how much powe

>> Right. Governments print money all the time, but the total value of all the money remains constant, thanks to inflation. It's just a measure of how much power someone has in a society compared to everyone else. Inflation, by it's definition, is caused because more money is chasing the same goods & services...which drives the prices up. That's why loose monetary policy (i.e. the Fed printing money) often comes with lots of "concerns about inflation". Also...if money was indeed constant as you suggest, and it's just a power tool, then why have we seen 2 phenemona in the last 100 years. 1. The greatest number of people are moving out of absolute poverty, than at any other time in recorded history (hundreds of millions if not 1 Billion+ by now) - meaning, more people (as a % of the global population) are earning enough income to move themselves out of an abject poverty state, at a faster rate than at any other time in recent recorded history. 2. The greatest income gaps between the top 1% of the top 1% and the rest. If the money supply were constant, both of those would be mutually exclusive. But they are not. Anybody can create wealth, likewise anyone can destroy wealth. Money is just the physical/tradable manifestation of wealth. It's just a proxy. That's all. No conspiracy to see here.

precisioncoder 14y ago
I think you misunderstood his argument. Assuming I understand correctly he was saying that if you have $100 in your society and 100 goods available for purchase, evenly each good is $1, if you have $200 and 100 goods each good is $2. Despite doubling your money it is still worth the same. Obviously it is more complex than that but I think that's the basic idea he was getting at. You can only increase the wealth of a country if you increase the amount of goods rather than the amount of money as money will more or less scale to goods. From what I understood he was referring to goods as wealth.

precisioncoder 14y ago

I think you misunderstood his argument. Assuming I understand correctly he was saying that if you have $100 in your society and 100 goods available for purchase, evenly each good is $1, if you have $200 and 100 goods each good is $2. Despite doubling your money it is still worth the same. Obviously it is more complex than that but I think that's the basic idea he was getting at. You can only increase the wealth of a country if you increase the amount of goods rather than the amount of money as money will more or less scale to goods. From what I understood he was referring to goods as wealth.