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Ask the Zimbabweans about the insignificance of 14 zeros in your currency. History is littered with far more examples of currency revaluation than long-term sta
by jballanc 13y ago
Ask the Zimbabweans about the insignificance of 14 zeros in your currency. History is littered with far more examples of currency revaluation than long-term stable measures of wealth (in fact precious metals are, possibly, the only example).
- fryguy 13y agoZimbabwe had hyper-inflation, which made currency worthless as soon as it was printed. Bitcoins have the opposite "problem".
- Jtsummers 13y agoSo in Zimbabwe, receiving $1,000,000 in the morning was a losing proposition because by nightfall you might sell the same good for $1,000,000,000. With hyper-deflation, spending $1,000,000 in the morning would be a losing proposition because by nightfall you might buy the same good for $1,000. Both suffer severe problems, economically, but who loses and who wins changes. The matrix is something like this: Inflation| Buyer | Seller | ---------+-------+--------+ Early | Win | Lose | ---------+-------+--------+ Later | Lose | Win | ---------+-------+--------+ Deflation| Buyer | Seller | ---------+-------+--------+ Early | Lose | Win | ---------+-------+--------+ Later | Win | Lose | ---------+-------+--------+ Ultimately, neither one is good. In the case of moderate deflation and inflation it's similar. There is less motivation to invest, greater motivation to save under moderate deflation. Moderate inflation increases the motivation to invest, but decreases the motivation to save.