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Is it "inflation" if each new IOU is accompanied by a corresponding unit of production? I thought not, but I am no expert.
by trhtrsh 14y ago
Is it "inflation" if each new IOU is accompanied by a corresponding unit of production?
I thought not, but I am no expert.
- seanalltogether 14y agoYes, because an IOU can be traded after its initial creation, and due to peoples inherent desire to save (hoard) assets theres no guarantee the IOU will ever be cashed in. Inflation occurs because people learn that more IOUs can be issued then are ever cashed in. Economies are naturally structured around this asynchronous trading structure because we want to help each other survive.