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You are espousing one form of economics which many consider unsustainable. Regardless, many assets are deflationary. Rich people buy real estate and commoditie
by aneth4 14y ago
You are espousing one form of economics which many consider unsustainable.
Regardless, many assets are deflationary. Rich people buy real estate and commodities because they are deflationary, or at least not inflationary. There is nothing wrong with assets that grow or maintain value.
Bitcoin is a liquid and easily transferrable deflationary value store, just like gold. Telling people they should submit to inflation for the greater good is ridiculous. Inflation works because it keeps those too poor to have real assets on the gerbil wheel. The wealthy (or smart) just store their money in non-inflationary assets and sit pretty.
Besides, if you can't get better than a 4% return, you probably shouldn't be investing in whatever it is you're considering anyhow.
- api 14y agoSustainability is really the achilles heel of inflationary economics. The Earth is finite. Exponential growth cannot continue forever. When a steady state is reached, that's apocalyptic to inflationary money systems since debts all the sudden can never be repaid. Edit: I don't think space colonization matters here. Sure, it may be possible. But Mars is sufficiently far from Earth and the energy cost of transport sufficiently high that a populated Mars would effectively be an entirely separate economy for everything but intangibles. I don't think a Mars colony would permit Earthly exponential growth to continue, even though Martian exponential growth could occur for quite some time. (Until Mars' own unique limits were reached.)
- vbuterin 14y ago> everything but intangibles So, everything but 90% of the economy in forty years' time?
- makomk 14y agoWhy would you want to repay the debts in the first place?
- alexmat 14y agoIf the interest rate drops.
- Evbn 14y agoPeople will find plenty of ways to kill each other before the Earth's resources are exhausted. We have a billion year energy supply and raw materials are never lost, only converted from one form to more annoying forms.
- Evbn 14y agoThat is backwards. Inflation helps debtors, punished capital holders, and is irrelevant to hand-to-mouth wage earners. Price inflation only hurts wage earners when it is coupled with flat nominal wages-- but that is merely a (too powerful) psychological trick that people don't notice.
- aneth4 14y agoAll wrong: - Inflation does not help debtors, unless they don't pay interest. Inflation is added to interest rates, so it has no effect. Inflation only helps debtors if they have a fixed interest rate and inflation goes up, which clearly not desirable or sustainable over a long period. In fact, inflation encourages debt, which creates a further enslaves debtor class and enriches capital holders. - Inflation does not hurt capital holders. Anyone with sufficient capital holds assets that are not inflationary, such as gold or real estate. - Price inflation hurts wage earners because real wages drop rapidly and requires nominal "raises" which creates a false reward, thus the hamster wheel. Got that 10% raise after 3 years? Congratulation, you make the same amount of real wage. Further, low wage earners can not afford or don't have the savvy to purchase inflation resistant assets, so what little they do have either depreciates or is inflated, thus the hamster wheel. I may sound like a Marxist, but I am not. I believe in the free market and real currency, not the modern mess we have.
- eli_gottlieb 14y agoInflation works because it keeps those too poor to have real assets on the gerbil wheel. Quite to the contrary, it gets the proletarians out of debt!
- aneth4 14y ago> Quite to the contrary, it gets the proletarians out of debt! Yes. All the proletarians whose debt is at an interest rate under the rate of inflation. Which is exactly zero of them.