4 ms·

Would love feedback - positive or negative

nabla9 13y ago
>The government and the Federal Reserve (yes, they are two distinct entities — not part of the same) have perverted the definition of something This system is not internal to US. Most countries have more or less independent federal bank and similar system. >Whatever money may be, ultimately, it is supposed to act as a store of value for your labor, ingenuity and good fortune. This is outdated idea and source of much confusion. Yes, money should act as reasonable store of value in short term. Money should not have store of value property that is better than alternatives. It should never be good investment. Money should be the most liquid asset, unit of account and medium of exchange before being long time store of value. Because contracts (including wages) are defied using money as unit of account, small inflation forces constant renegotiation of contracts. It's fluid in the gears of the economy. Store your value elsewhere. It's easy. Money is just an asset. Theoretically, you can define money as the most liquid asset. Transition from money to other assets is fluid (different M's) based on them being money-like and there is nothing confusing in it unless you falsely assume that money should have some kind of magic substance that other assets don't have. Your car can be more money-like if you turn it into financial instrument by taking a loan against it.
- sshamoon 13y ago
  Why are you saying this is an outdated idea? For the many millennia that money has existed, it has been a store of value AND a transactional commodity. Only in the past 100 years (more like 40, really) has this changed so drastically. Are we, as a society, so special that we can change what money has been for all of humanity throughout all of time?
  - nabla9 13y ago
    We are not special. Money has been very unpredictable entity in history. In the past, economic thinking was not that developed. There were no alternatives. Historical fluctuations in inflation: https://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg https://en.wikipedia.org/wiki/File:US_Historical_Inflation_A... Historical interest rates: http://i.imgur.com/i0xit0K.png http://i.imgur.com/i0xit0K.png More important than store, is predictability. If you know it's going to be 1-5% inflation next 20 years with high probability, life is much easier to plan than if there is high change of huge deflations or inflations.
    - sshamoon 13y ago
      I completely agree that predictability is an important aspect of money. We don't know that inflation will be 1-5% over the next 20 years with any certainty. This makes planning very difficult with money. I suppose my point was to hold a mirror to society and show how we value ourselves using money as the barometer.
      - nabla9 13y ago
        The main benefit of the fiat money is that it follows the economy and not the other way around. USD is what it is because US economy. 30-year bonds have yield 3.58% and it tells us much about how markets see the future of U.S economy and inflation.

>The government and the Federal Reserve (yes, they are two distinct entities — not part of the same) have perverted the definition of something This system is not internal to US. Most countries have more or less independent federal bank and similar system. >Whatever money may be, ultimately, it is supposed to act as a store of value for your labor, ingenuity and good fortune. This is outdated idea and source of much confusion. Yes, money should act as reasonable store of value in short term. Money should not have store of value property that is better than alternatives. It should never be good investment. Money should be the most liquid asset, unit of account and medium of exchange before being long time store of value. Because contracts (including wages) are defied using money as unit of account, small inflation forces constant renegotiation of contracts. It's fluid in the gears of the economy. Store your value elsewhere. It's easy. Money is just an asset. Theoretically, you can define money as the most liquid asset. Transition from money to other assets is fluid (different M's) based on them being money-like and there is nothing confusing in it unless you falsely assume that money should have some kind of magic substance that other assets don't have. Your car can be more money-like if you turn it into financial instrument by taking a loan against it.

sshamoon 13y ago
Why are you saying this is an outdated idea? For the many millennia that money has existed, it has been a store of value AND a transactional commodity. Only in the past 100 years (more like 40, really) has this changed so drastically. Are we, as a society, so special that we can change what money has been for all of humanity throughout all of time?
- nabla9 13y ago
  We are not special. Money has been very unpredictable entity in history. In the past, economic thinking was not that developed. There were no alternatives. Historical fluctuations in inflation: https://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg https://en.wikipedia.org/wiki/File:US_Historical_Inflation_A... Historical interest rates: http://i.imgur.com/i0xit0K.png http://i.imgur.com/i0xit0K.png More important than store, is predictability. If you know it's going to be 1-5% inflation next 20 years with high probability, life is much easier to plan than if there is high change of huge deflations or inflations.
  - sshamoon 13y ago
    I completely agree that predictability is an important aspect of money. We don't know that inflation will be 1-5% over the next 20 years with any certainty. This makes planning very difficult with money. I suppose my point was to hold a mirror to society and show how we value ourselves using money as the barometer.
    - nabla9 13y ago
      The main benefit of the fiat money is that it follows the economy and not the other way around. USD is what it is because US economy. 30-year bonds have yield 3.58% and it tells us much about how markets see the future of U.S economy and inflation.