4 ms·

"because it prevents governments from increasing quantity in times where hoarding is occurring." As opposed to a currency which allows a government to delibera

by astine 14y ago

"because it prevents governments from increasing quantity in times where hoarding is occurring." As opposed to a currency which allows a government to deliberately and invisibly transfer wealth from the poorest to the richest in society? With hoarding you can switch to silver or copper. With the current system you have to put up with the decisions of an unaccountable class of people who can manipulate the currency for their own personal gain without repercussion. It's as if the government was trying to solve the problem of hoarding by printing more money and giving the money to the hoarders.

danielweber 14y ago
Inflation doesn't transfer wealth from the poorest, for normal-world version of "poorest." They have debt, not piles of cash hidden in their mattresses, and inflation reduces the amounts of those debts. Inflation is a bugger for someone who wants to hide dollars in their mattress and have them be worth the same in 30 years.
- astine 14y ago
  "and inflation reduces the amounts of those debts." Only if inflation is at a higher rate than than the interest on the debt. Which is rarely the case. Bank loans are constructed so that the bank makes money and that couldn't happen if they loaned money at a lower rate than inflation allowed. If you want to escape inflation, you put your money in a savings account and hope that the interest rate is properly matched to the inflation rate (they're commonly indexed to inflation.) This is less feasible for poorer people who don't have enough money to take out bank accounts and who necessarily have a higher percentage of their money in cash.
- msandford 14y ago
  The newly minted money is given to: the banks. Who benefits from that new money? The banks! Who benefits from the banks benefiting? The rich! The poor have to pay higher prices and see their raises lag the increased prices. The poor get poorer while the rich get richer. Once your income substantially outstrips your daily need for food, water, shelter, etc inflation hurts you less as you are able to invest. The poor are always behind and thus pay the most for inflation.

by astine 14y ago

danielweber 14y ago

Inflation doesn't transfer wealth from the poorest, for normal-world version of "poorest." They have debt, not piles of cash hidden in their mattresses, and inflation reduces the amounts of those debts. Inflation is a bugger for someone who wants to hide dollars in their mattress and have them be worth the same in 30 years.

astine 14y ago
"and inflation reduces the amounts of those debts." Only if inflation is at a higher rate than than the interest on the debt. Which is rarely the case. Bank loans are constructed so that the bank makes money and that couldn't happen if they loaned money at a lower rate than inflation allowed. If you want to escape inflation, you put your money in a savings account and hope that the interest rate is properly matched to the inflation rate (they're commonly indexed to inflation.) This is less feasible for poorer people who don't have enough money to take out bank accounts and who necessarily have a higher percentage of their money in cash.
msandford 14y ago
The newly minted money is given to: the banks. Who benefits from that new money? The banks! Who benefits from the banks benefiting? The rich! The poor have to pay higher prices and see their raises lag the increased prices. The poor get poorer while the rich get richer. Once your income substantially outstrips your daily need for food, water, shelter, etc inflation hurts you less as you are able to invest. The poor are always behind and thus pay the most for inflation.