4 ms·

I'm pretty sure that if you abolish paper money, you'll just give rise to a strong barter economy culminating in private paper money.

by anon4 11y ago

VLM 11y ago
Or you get a commodity bubble. Also a bubble in art, collectibles in general, metals... Also the old "alpha strategy" or whatever it was called from the 70s. If you know the price of TP is going to go up 20% per year (or even just 1%) if thats the best rate of return you can get, you buy a years supply of TP. Its not like you're going to stop using it anytime soon and you know prices only go up. This is the middle class version of the strategy, the poor don't have the money to buy a years supply of TP at once and the rich are talking about larger sums of money. In the short term this "activity" is exactly what they're trying to spark. The problem is in the medium and long term all you've done is pull demand forward.
- pjc50 11y ago
  Absolutely. Faced with a choice between "deflate property prices" and "rewire the entire economy to force property to be the only long term store of value", people holding a lot of property are trying to organise the latter.
  - mxfh 11y ago
    So in effect for any non-institutional, non-property owning individual it still feels like an inflation since increasing rents and property prices will eat up way more income than any negative interest rate could raise. Classy way to ramp up societies inequality.
  - walterbell 11y ago
    From http://www.nybooks.com/articles/archives/2015/apr/02/new-york-conspicuous-construction/ http://www.nybooks.com/articles/archives/2015/apr/02/new-yor... "58 percent of New York City condominiums are paid for entirely in cash ... If, as Goethe posited, architecture is frozen music, then these buildings are vertical money."
- crdoconnor 11y ago
  >Or you get a commodity bubble. Which, coincidentally, would help a LOT to prop up Citigroup's ailing balance sheet and let them take on even more risk, until they end up needing a 3rd bailout. Their economist didn't mention that when they went on about how great this idea was, though.
- bunderbunder 11y ago
  > Or you get a commodity bubble. Which is a scary thought. The Fed holding rates at a very low level for a long time was a large factor in the housing crisis. It prompted many depositors to start casting about for somewhere else to put their money. Many of them settled on mortgage-backed securities. We all know what happened next.

I'm pretty sure that if you abolish paper money, you'll just give rise to a strong barter economy culminating in private paper money.

by anon4 11y ago

I'm pretty sure that if you abolish paper money, you'll just give rise to a strong barter economy culminating in private paper money.

VLM 11y ago

Or you get a commodity bubble. Also a bubble in art, collectibles in general, metals... Also the old "alpha strategy" or whatever it was called from the 70s. If you know the price of TP is going to go up 20% per year (or even just 1%) if thats the best rate of return you can get, you buy a years supply of TP. Its not like you're going to stop using it anytime soon and you know prices only go up. This is the middle class version of the strategy, the poor don't have the money to buy a years supply of TP at once and the rich are talking about larger sums of money. In the short term this "activity" is exactly what they're trying to spark. The problem is in the medium and long term all you've done is pull demand forward.

pjc50 11y ago
Absolutely. Faced with a choice between "deflate property prices" and "rewire the entire economy to force property to be the only long term store of value", people holding a lot of property are trying to organise the latter.
- mxfh 11y ago
  So in effect for any non-institutional, non-property owning individual it still feels like an inflation since increasing rents and property prices will eat up way more income than any negative interest rate could raise. Classy way to ramp up societies inequality.
- walterbell 11y ago
  From http://www.nybooks.com/articles/archives/2015/apr/02/new-york-conspicuous-construction/ http://www.nybooks.com/articles/archives/2015/apr/02/new-yor... "58 percent of New York City condominiums are paid for entirely in cash ... If, as Goethe posited, architecture is frozen music, then these buildings are vertical money."
crdoconnor 11y ago
>Or you get a commodity bubble. Which, coincidentally, would help a LOT to prop up Citigroup's ailing balance sheet and let them take on even more risk, until they end up needing a 3rd bailout. Their economist didn't mention that when they went on about how great this idea was, though.
bunderbunder 11y ago
> Or you get a commodity bubble. Which is a scary thought. The Fed holding rates at a very low level for a long time was a large factor in the housing crisis. It prompted many depositors to start casting about for somewhere else to put their money. Many of them settled on mortgage-backed securities. We all know what happened next.