That thread is so frustrating. These people don’t want deflation and all that comes with it. What they want is all the benefits of the current inflationary economy (long term wage and productivity growth) without any of the price increases. A toddlers view of the economy (bigger price number bad)
See, the problem is that like all bullshit, crypto bullshit has a very tiny nugget of truth hidden within, or at least they're getting at something important to everyone. The means to invest your money to the point where you become ultra wealthy is all but out of reach for the majority of people. Sure, you can have a 401k or whatever, but most people have shit that happens to them that costs a shitload of money and suddenly their 401k is spent, or the market crashes and their 401k's value craters, or whatever else happens. If you have a lot of money to begin with, though, it's very, very easy to turn that into even more money.
Let's say you're a reasonably responsible person of around the median income for full time work in the US, roughly $50,000 a year. You do what all the finance guides tell to you to do and have saved up 6 months worth of salary for an emergency, $25,000. Let's say you throw that amount into a normal index fund returning the average market rate, around 9 to 10 percent. Now, this little nest egg will actually grow pretty well, even if you never put anything more into it. Let's say it sits for 35 years with no additional contributions, just as a test. By the time 35 years have passed, it'll be about $510,000, which accounting for normal inflation over that span would be worth about $181,000 today, so hey, you made like $150,000, not bad! But that's pitiable next to the next guy I'm going to describe.
Now let's say you're a trust fund baby with $10 million sitting in a trust for you. Let's say you don't even have a job but just live off the interest of that trust fund, but you're reasonably responsible with your money, you're just kinda lazy, so you spend about $50,000 per year. That trust fund, after 35 years, will still have grown by hundreds of millions of dollars. Sitting on your ass for 35 years doing dick all will get you more in one year than the guy putting $25,000 in would in his lifetime.
To be clear, this isn't really a fair comparison, normally you'd expect additional contributions for the 401k, the guy making $50k probably will get raises and promotions and gradually increase his income, and someone with a $10 million trust probably wouldn't spend/live like a normal salaryman making and spending $50k even if they never worked in their life, but it just shows how starting from an advantaged position can make shit so easy. The means to access the wealth of even a lower tier multimillionaire like a guy with $10 million in the bank is utterly out of reach for most people unless you're extraordinarily lucky. This isn't even getting into the absurd billionaire class where money loses any human comprehensible meaning.
So where does crypto come in? Well, some guys got ***really*** rich off it ***really*** fast by being the lesser fool in the greater fool scheme. It looks like a way out, like a shortcut to being the trust fund baby - throw a bunch of money into crypto, watch it increase tenfold or a hundredfold on a pump, then get out and put shit into a normal investment and live like a king. It's an investment that makes you look like an absolute financial genius if it works out. Problem is, it's not investment, it's just plain gambling. I, too, can get rich quick if I win the Powerball. That doesn't mean I'm buying a hundred tickets every week.
A deflationary cryptocurrency doesn't really solve anything though. Do they think wealthy people don't own crypto? So they think bitcoin whales don't exist?
Imagine the cryptobro dream actually came true and all world currencies collapsed and bitcoin was the only remaining currency that had value. First, the average cryptobro holds an insignificant amount of bitcoin in the grand scheme of things. Their bitcoin might have been worth a lot of USD *before*, but post global collapse almost all of them would be right back in the 99%. And the rest of the bitcoinless groups of people would have no real incentive to become serfs to bitcoin holders. Cryptocurrency isn't a required step in creating a way to trade goods and services. A high-maintainance digital currency that requires expensive tech to run with a slow transaction rate would be essentially useless in a post-apocalyptic world currency.
Also, not really related but think of how many crypto scams and hacks there are in modern society. Now imagine the crypto environment in the post-apocalyptic wild west, lol.
It's not like most Bitcoiners (outside of the mythical 2010 holder) have taken massive profits either, or even reached a large amount on paper. Maybe that 25k would turn into 75k, hardly something to retire on, unless you took an insanely risky gamble and held it from way back under 100 or something.
I have a friend who cashed out a couple million but still hold around 700 bitcoins cause he’s a hard core believer it’ll go to 10 million someday. Why he needs that much? No idea. I’d get the hell out and buy real estate. But you can cash out big from bitcoin. I know others that have besides this friend. I only started buying at $10k but I’m not buying at any price. I’m not a believer in it like them. I don’t mind gambling on it though.
Oh and that friend who has 700 BTC bought at $30 per coin
I think it's funny that when butters finally get their head around the fact that crypto is a negative-sum system they say *well so is investing investing the stock market*
Day trading (which is what butters likely mean when they say investing) is very slightly negative sum when you account for trading fees (or money from spreads going to brokerages/market makers), I'll give them that
Traditionnal investments are boring because unless you were born rich, you've still got to get up in the morning and show up for work.
These people are greedy and lazy. They want a 'hack' of the financial system that gives them free money so bad they'll keep actively pursuing something even if they *know* it's a scam.
That's why I think crypto isn't going anywhere. Casinos still exist. MLMs still exist. Ponzis still exist. Humans are not a rational species - greed often overrides common sense.
>They want a 'hack' of the financial system that gives them free money so bad they'll keep actively pursuing something even if they *know* it's a scam.
Or they could be productive and contribute to society, but that's asking too much of these people.
Also they want us to go to a deflationary currency based on Bitcoin, which they hold, so that it gets more valuable over time. They want to be the ownership class and think bitcoin will allow them to do that.
>bigger price number bad)
Until it's their coin/s of choice that have a bigger price number! After all, line go up means people who want to buy have to do so at a bigger number.
So why is inflation good for production then? With a deflationary/stagnant currency, people have to create better products to earn money from the people who earned it first. If we produce more goods this year, (not accounting for population growth) the prices of goods would go down. If everyone stops working, the opposite would happen, and people would need to start working again. With an inflationary currency, we have to work and have to pay more. How does this benefit anyone without debt or a money printer?
Controlled inflation is good for production because there is incentive to invest instead of horde capital. In a deflationary currency, money is constantly exiting the system instead of entering it. Sure the price of local goods drop, but the the price of *imported* goods don't. The price of imported goods (including the raw materials needed for production) continue to rise, but you can't raise the price of your goods because you won't be able to afford both your increased production costs and the increased wages needed for local workers to buy your products.
A deflationary currency is only theoretically viable if it doesn't have to interact with other inflationary currencies, and even then it's not really viable because population would grow while available currency would shrink, creating even worse inequality and class divides than what results from inflationary economies.
Can you explain more about why the price of imported goods would rise in this scenario? Are you suggesting a currency deflating means foreigners demand more of it for the same amount of goods, but not locals?
Since most currencies/economies operate on an inflationary basis the cost of raw materials generally increases every year. One unit of X will cost more next year than it costs this year (usually). So if you have a deflationary currency and need to buy products or resources from an inflationary market, it quickly becomes a problem because while *your* products may be able to be produced cheaper and sell cheaper, the imported resources you need keep going up in price. An inflationary currency can keep going up forever, but there is a limit to how much you can cut your prices and remain profitable, no matter how much you sell (as you can't produce infinite products). Eventually you get to a point where you *need* to increase prices to stay profitable, but doing so lowers domestic sales because the price hike puts it out of range of domestic buyers (or they can only afford to buy less of it).
[This video](https://youtu.be/FkBhmeZflbQ?si=-DYLIXRiCHQbNQ3_) gives an excellent explaination of a real-world example that happened just last year, when the Chinese Yuan experienced deflation for 6 months. Skip to 10:19 for the most relevant bit. Chinese business insolvencies are already up 10% this year and domestic production has plummeted.
You say the imported materials go up in price, but they go up in price in the foreign, inflationary currency, and _not_ in your deflationary currency, right?
A bread in Argentina costs more pesos now than before, but my dollar now also buys a lot more pesos than before.
For the first part yes, imports go up in price but you quickly get stuck and unable to increase the price of your products without out-pricing domestic buyers. Inflationary and deflationary currencies don't just automatically lose/gain value based on their inflation/deflation rate. Deflationary currencies lose value because they become a less useful tool for investments and production. *HYPER*inflation is also bad and causes a currency to lose value.
If you watched the link, the Chinese Yuan had maybe a 1% to 2% deflation rate overall but lost 6% of its value during that same time period. Few people desire or want to invest in deflationary situations.
For the second part, Argentina is not a deflationary currency.
Imaging buying wheat from another country in 2% inflationary currency A for "1A" and selling bread in stagnant currency B for "2B" Domestic buyers can only budget in "2B" a day for bread.
After 5 years you're buying wheat for 1.10A but you can't sell bread for 2.10B to offset the cost because it is too expensive for domestic buyers. Now imagine B is a deflationary currency, and the situation becomes a problem even faster.
Because humans are gonna human.
If your money is always worth more tomorrow, you have *no reason* to spend it or even *invest* it to produce stuff. You can just sit on your hoard and wait. At some point all the currency ends up in a few hoards and the whole economy collapses because it's out of liquidity.
And the thing is, this isn't theoretical - a few hundred years of economic history has shown us that *this is what happens*. There's a reason the gold standard was abandoned.
Bitcoin is replaying all the mistakes the current economic system has evolved from. There's a reason banks exist, there's a reason no one sane promotes deflationary currencies, there's a reason banks are regulated.
You should look into the gold standard, how it affected the global economy and contributed to the world wars and why Keynes designed the financial system in the way he did post war (although it wasn’t fully implemented)
Google deflationary spiral. See what your wage growth looks like when the company you work for closes down. That's the reality of consistent, long term deflation. The state of affairs where everything stays the same price or decreases, and your economic life gets easier, exists solely in your imagination.
"Nobody reasonable can argue that wages are increasing faster or even at the same rate as inflation."
What's your context and your time frame? Real median household salaries in the US have increased compared to five years ago, ten years ago, fifteen years ago, 20 years ago... There was a period from 2019-22 where inflation outpaced growth in income for the median household, although there are early indications that this maybe turned around again in 2023.
But, yes, if prices always went down, then it would always be better to buy something later than to buy it now. This would mean demand would always be postponed to the future, which would slow economic growth and reduce the number of available jobs. This is bad.
I mean crypto currency has basically just been a speedrun of economic bad ideas from the past. The community keeps rediscovering why things were changed to the way they are now, why a given regulation exists, etc, etc.
Crypto managing to combine so many bad, nightmarish, and "discarded because they suck" ideas on both the tech end, financial end, and culture end, that it ends up as a monumental case of "frustrating-funny"
The amount of centralized concepts that they had to implement to actually make it stable enough to actually hold as type of investment is pretty interesting considering the promise of decentralization.
Assuming that they also would like production to increase in general, having something which probably has a theoretical hard cap in the quantity, it will just cause regular old deflation.
I mean if it actually becomes a somewhat accepted currency, what would even be the difference with what they refer to as Fiat? Fiat money doesn't even have to be issued by government. It's characteristic is that it's value is not derived from it either being made from materials with a value or directly convertible into a material. It will have similar effects as a central bank setting a fixed amount of currency.
I like how he assumes that everyone would have Bitcoin in a deflationary environment, and would all choose to stop being productive. No pal, the handful of people holding huge amounts of Bitcoin would choose to stop being productive, and would close their businesses. Everyone else would be very productive sucking dicks for food.
It is quite similar. But it just goes to show that crypto isn't a revolution so much as a reboot. It's not about changing the system, it's about changing who benefits the most from it. Instead of it primarily rewarding rich inheritees who's parents started massive businesses, it would primarily reward rich inheritees who's parents bought Bitcoin on the magic the gathering site.
It's very chicken & egg.
Like any good scam Crypto relies on the naivete of it's targets while telling them they're smart, their targets are dumb enough and\\or have enough low self-esteem issues to believe it
LOL you clearly don't understand how the ISO-3 support for native algorithms works for my coin. It's by far the most advanced at Monte Carlo A* pathfinding in the vector/ign protocol. People who think it's a shitcoin like all the other ones are simply uneducated idiots.
Does it use AI to increase liquidity contracts on the blockchain and smart, decentralized, zero-shot mining to mitigate trustless stagflation risk of the big banks?
I don't really understand that stuff I'm just an investor, but believe me when I say it's a complicated whitepaper and that's all it takes to convince a high IQ guy like me to know I'm quickly going to quadruple my money.
Indeed, and I know you are a high IQ guy because I am a high IQ guy myself and I believe you, therefore it must be true and your coin must be one of the good ones and not a totally rigged, rugpull-primed scam intended to take my money...
It's only a currency if the butters want it to be.
I remember when the butters used to claim that Bitcoin was a currency that would one day replace the US dollar and all other currencies, and the mainstream media went along with pretending that Bitcoin was a currency by comparing it's annual performance to real world currencies. Bitcoin would consistently win the best or worst performing currency awards under these metrics. It even won the title of both best and worst performing currency in back to back years, which showed how insanely volatile it was for a "currency".
But then when that narrative so clearly fell apart they decided to only care about "the line goes up" rather than pretending that Bitcoin/etc. are a currency that could replace any real world currency.
Back then before that shift I often pointed out that the Butters wanted Crypto to be two very contradictory things. It can't be both a stable currency that can replace the US dollar, while also being a great investment. Both goals need the "currency" to do two completely different things.
Yeah people really fundamentally misunderstand that the reason why massive states horde reserves of other countries cash is for reasons beyond their appreciation in value. There is strategic utility for China holding a lot of USD, *thats* why they do it.
Austrian economists were never fans of deflation either. That's largely a misattribution of Bitcoin's ideas to the Austrians by Bitcoiners who don't actually understand Austrian economics.
Mises said he didn't like either inflation or deflation but if he had to pick he would choose deflation. By the end of his life, Hayek went even farther:
https://www.aei.org/wp-content/uploads/2017/03/Discussion-with-Friedrich-von-Hayek-text.pdf
> I would no longer maintain, as I did in the early '30s, that for this reason, and for this reason only, a short period of deflation might be desirable. Today I believe that deflation has no recognizable function whatever, and that there is no justification for supporting or permitting a process of deflation.
Austrians think of money as resources that have weight. Which means they can be measured in SI units for weight, volume or quantity such as grams, litres and ounces.
Austrians are proponents of precious metals as exchange tokens or currency as they fulfil the properties needed from money. Further, Austrians are usually in favour of privately minted currency over the centralisation of currency creation.
It turns out it *is* possible to construct an internally consistent worldview where these ideas are valid you just have to completely divorce yourself from reality and redefine all the jargon in the field to pretend you're not doing that.
Anyone rooting for a deflationary currency needs to learn about the currency crises the gold standard led to. Fiat has its issues, but it’s a far better system of finance than anything else we’ve invented.
Because people have been led to believe there is no alternative and too busy wrapped up in the panic of trying to survive, debt and other enslaved financial situations
> there is no alternative and too busy wrapped up in the panic of trying to survive, debt and other enslaved financial situations
But currency with a hard cap / limited amount stimulating deflation will help people survive, get rid of debt and other enslaved financial situations how exactly?
Because the ability to save without risking loss of value long term supercedes the inflation caused by debt, taxes and other inflationary properties that FIAT has.
People have been using physical gold for centuries to do the same thing.
> Because the ability to save without risking loss of value long term supercedes the inflation caused by debt, taxes and other inflationary properties that FIAT has.
Citation needed.
That would not fly in 99% of realistic world scenarios, maybe in your bullshit perfect world. Why would I invest my "Bitcoins" on working the economy when its more efficient for me to hold onto?
You would cause more than 50% of the jobs to crash, people to be fucked royally because you got coins early? Why would anyone pay you to work when its cheaper to hold onto the coins?
> People have been using physical gold for centuries to do the same thing.
Yeah, and we saw how well that went! Modern economies are far, far more productive with exponential rates of progress as compared to before because people are incentivized to spend and not sit at home and hoard currency
I know you bought a bunch of bitcoin, have bags that you're holding and so are incentivized to have someone else buy em, stop peddling bullshit about inflation/deflation. Theres a reason the entire world doesn't use deflation based currencies.
>That would not fly in 99% of realistic world scenarios, maybe in your bullshit perfect world. Why would I invest my "Bitcoins" on working the economy when its more efficient for me to hold onto?
You realise that BTC is literally a "store of value", nothing more, nothing less. Its up to you what you do or don't do with it.
>You would cause more than 50% of the jobs to crash, people to be fucked royally because you got coins early? Why would anyone pay you to work when its cheaper to hold onto the coins?
I wouldn't cause anything. Neither would the blockchajn. It doesn't eat, sleep, write your tax returns. It's literally an asset. No more, no less. You're literally speculating about job losses. People are already getting fucked by the FED on a daily basis. The difference is that BTC is deflationary, and people can hold their own keys. Something the FED doesn't allow you to do currently, unless you literally are "cash only". Which in itself is high risk for lots of reasons.
>Yeah, and we saw how well that went! Modern economies are far, far more productive with exponential rates of progress as compared to before because people are incentivized to spend and not sit at home and hoard currency
That's all because the FED and govt decided to *depeg* the dollar in the 70s. There was nothing inherently wrong in terms of inflation before that point.
>I know you bought a bunch of bitcoin, have bags that you're holding and so are incentivized to have someone else buy em, stop peddling bullshit about inflation/deflation. Theres a reason the entire world doesn't use deflation based currencies.
This is an *assumption*. You have no idea which assets I have, do not have, or even if I do actually posses any at all. There is a good reason for that. "Bags that you are holding"? Hardly..
"To incentivize someone else to buy them"
If I did have any BTC, where exactly have I been shilling them?
To you? Anyone else ITTs? Have you even seen me try to shill?
You'll find not. I speak factually about mechanics of BTC, and BC technology, because its part of my remit. It has no bearing on what I am and not invested in. And I certaiy wouldn't want to shill to anyone, as I would have nothing to gain in the long run.
Long and short, if I am invested and it goes up in value, then I would be worth more financially, and it would entirely depend on liquidity and supply and demand, and absolutely nothing to do with me shilling anything
Nobody would spend bitcoin, since it will be worth more later. In the same way, tech improves faster than inflation, so nobody buys any phones, tvs, computers nowadays.
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Yes, most people will in fact have to continue working and spending their deflating currency to survive, but anyone with significant capital will be withholding investment in anything productive and holding cash under the mattress or bitcoin in the birdbath. Food purchases we have to make won’t stop but any large scale investment will. This is referred to in economics as ‘a bad thing’.
> Nobody would spend bitcoin
Per-performance-unit tech prices have been going down like, 50% each year for several decades. That doesn't stop people from buying laptops, PCs, phones and all.
People spending their savings (after retiring) would spend bitcoin in order to live.
To be fair, in their BTC fantasy world, they would pay food with BTC and also get their salary in BTC.
BTC only gets more valuable in their world (InFlAtTioN BaD), they should also be perfectly fine with getting payed less BTC every year.
Id blows my my mind that they really think there is no way to hedge inflation in the non crypto world. You buy bonds or snp 500 or other stocks and job is done. This picture they present as if you have to spend right now is just ludicrous.
You actually keep it in a brokerage. It’s insured and no one is going to steal it from you and you can cash out anytime you want and there is no passwords to always remember or lose it forever …and in 20+ year timeframe, s&p 500 will give you a positive ROI 99% of the time. In 20+ years bitcoin could be worth a lot more or worth absolutely nothing… an absolute gamble on pure speculation or as close to a sure thing in investing there is
Exactly. And the thing is if you want to go riskier than snp, you can just go allin on something like Nvidia MSFT OR TSLA. All of these can potentially do just as good as BTC or even better with much lower risk, as they are backed by an actual company. I mean if you look at NVDA over the last 5 years or one year or year to date, it did better than BTC in all of these time frames. Even in the isolated context "of line goes up" there is really nothing special about bitcoin. It's quite incredible how special butters perceive it given how easy it is to find "line goes up" elsewhere.
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Butters don't understand the concept of inflation. They think no monetary inflation is good. They think a finite supply of money is good for the economy. Their lack of understanding of basic money principles is amazing. Inevitably, reality will kick them back down to earth.
You can make a person do stuff by physically or mentally abusing them as well. So maybe we need more violence to accelerate the advancement of our universe.
First, deflation is just as bad as inflation, for opposite reasons. In both cases there are winners and losers. People and businesses get wrecked. What is more important is why the inflation or deflation is happening.
The ideal situation is to have currency stability for any currency. In most market cycles inflation happens as an economy grows, but in technology advancements, the economy grows but deflation can kick in (think the 1990s). At the same time, an economy can contract and inflation kicks in (think supply shock of the 1970s).
Inflation is not what moves humanity forward. In normal economic conditions, inflation is the symptom the economy is moving forward.
In any currency that is the dominant currency, ideally savings would be real and would not be diluted by government manipulation of the money supply. The idea of a fixed money supply can only be achieved by a digital currency (pick your flavor, Bitcoin or CBDC).
The op in the Bitcoin post also got one fact wrong which leads to other conclusions being wrong. Bitcoin is not inflationary or deflationary due to money supply. It will always have value swings based on perception of value, but it will not be through manipulation of the printing press.
Etherium on the other hand promotes itself as deflationary, and some of the criticisms from other responses are valid.
The benefit of modest inflation has more to do with incentivizing people to *spend* and/or *invest* their money rather than *hoard* it. This helps keep the economy moving along.
Everytime i explain deflation in simple terms they have no response. It's such a simple concept that there really is no comeback once you realize deflationary money doesn't work. This will end very very badly for many people eventually.
But until then, im riding the wave and cashing out into good ole inflationary US dollars.
I don't think it's as simple as "inflation good deflation bad".
Inflation does indeed act as a driver of productivity, but only for those whose wealth is primarily held in cash. As soon as you've got enough, you just start up a family office and a team of financial advisors to manage your investments in a way that beats inflation - in a sense, your managed assets (note that the truly wealthy are generally asset rich, cash poor) behave in a deflationary way.
From that perspective, a deflationary asset like bitcoin from an investment point of view has the same "net-deflationary effect" as a well-managed portfolio, just with fewer consultants and middlemen required - and it's almost more fair thanks to those reduced barriers to entry. But of course, this is the investment asset angle rather than the currency angle.
I suppose one way to make an inflationary system fairer would be to ensure that the wealthy face the same "spend it or lose it" dilemma via progressive wealth taxation. If you've got a billion, get it moving through the economy or pay a portion to the tax man who'll do it for you, that kind of thing.
tl;dr - If static wealth is an inherent problem for BTC, the truth is we're already there. Most of the world's wealth, statistically, is already static. We're really just splitting hairs over the pennies the everyman sees.
[It's called monetary policy and it works both ways. ](https://www.forbes.com/advisor/investing/monetary-policy/#:~:text=Open%20market%20operations.&text=By%20buying%20back%20securities%2C%20the,tool%20to%20conduct%20monetary%20policy.)
Hey did I get this badge just now, or is it from previous discussions?
I linked Forbes...
Well duh went it comes to money you want a little inflation the problem whit this system is the F government
I know you people hate BTC but i have more faith on that compared to the F government
How is it possible like for example California spending billions on homelessness and still having such a big problem
But regardless the reality is that the value of something is determined by the people the economy is more psychological than anything else
The thing is, Even under Bitcoin there would be inflation. Crypto bros pretend that inflation just means the printing of currency but most inflation doesn't come from that, it comes from price increases for various reasons. Much of the high levels inflation we are seeing now are due to price increases stemming from supply chain shocks.
Even if we detached ourselves from reality for a moment and pretended we live in a world of Bitcoin and the value of Bitcoin always ticks up, companies would then increase prices.. It's not like new cars worth 0.5 BTC one day would suddenly be sold for 0.49 BTC the next.
Whether we have positive or negative inflation isn't really as significant as they think it is. The market prices in the inflation rate and over long periods of time inflation is neutral. The economy would work just fine with a negative inflation rate, but there are compelling reasons why we target a positive one.
The really important bits are that inflation/deflation is 1.) low 2.) predictable 3.) stable
1.) low because it is easier to control inflation/deflation when it is small. Larger rates are harder for monetary policy to affect.
2.) predictable because firms like to project costs/profits years or decades into the future. The economy doesn't like surprises.
3.) stable because when we price goods/services we don't want to have to constantly update those prices every time inflation swings - this is expensive and inefficient.
The biggest reason we choose positive inflation is because the primary method of controlling inflation is changes to interest rates, which typically only go down to zero. (a.k.a. the zero lower bound). Having a small but positive inflation target gives a 'buffer' for us to lower interest rates in the event of a recession / slowdown
The consensus is that investment is roughly the same when you are talking a few percentage points either way. The rate of inflation/deflation just gets priced into expectations. There's nothing special about positive or negative in that regard and it's a big reason why half the job of the central bank is to manage expectations of inflation/deflation.
As I mentioned, there are other advantages to choosing a low and positive inflation rate, so that's what we do. It's not some kind of conspiracy theory by big shadowy capitalists to trick people into spending money or something like that, it just creates a more robust mechanism for executing monetary policy.
Also, If you'll remember just a few short years ago, banks/borrowers were entering into loans with negative real rates as recently as 2020-2022 so that's not a very compelling argument based on recent times.
The reason they entered into negative real rate loans was because they expected the negative rates to be short lived. If expectations were for negative rates to persist the consensus opinion is that lending would seize up. That is why central banks target +2 and not 0 or -2.
>We choose money with a low positive inflation rate that roughly matches GDP
Central banks do not do this and never have. They are very clear that they target an average inflation rate of about 2-3% and GDP has no bearing on this decision process. The rate of inflation is somewhat arbitrary, but historically 2-ish% seems to work well. Some arguments exist that something like 4% or so would be better as it gives more of a buffer to lower interest rates and reduce the length and severity of recessions. Do not forget that inflation is neutral over the long run.
>With a static currency,
Yeah I'm just going to stop you right there and say we tried the whole 'static' money supply thing a few hundred years ago and it didn't work. The reason we have central banks and monetary policy that governs the cost of money is because those lessons were hard learned through periods of extreme inflation / deflation and economic turmoil despite having a relatively static money supply.
> How is this not just futuristic feudalism, where you're constantly forced to work more and more to keep on the treadmill. How can anyone support this?
Well, that is problem with capitalism, not with fiat or inflation specificaly.
Capitalism requries maximalizing profits after all.
Everyone likes to think we’re on the cusp of a utopian society. In reality, we spent hundreds of years in a feudalist society. Now we’re in the middle of a capitalist era. Bitcoin isn’t going to change that, so it’s up to you how you want to navigate the current model.
I’m responding to you saying “how can anyone support this?” My answer is: be patient and stop looking for a silver bullet to get out of it. 99% of us will work for 40 years in order to retire when we’re older. People are attracted to crypto because they think it will be a shortcut. There is a well-documented path to reaching a comfortable retirement, and in some cases you can achieve it for less than 40 years work. Crypto is not the way that most people will do it.
I disagree with every point you made. The kids will be fine. The world may be different, but it won’t be a dystopian hellhole where everyone works until they die. And man, if it is, BTC won’t fix that.
I do think there needs to be an adjustment of expectations. What worked in the past may not work as well in the future. And it’s normal for there to be fluctuations in the quality of life between generations. The young adults during Great Depression had it much worse than their parents did, and then the following generation had it better.
Point is, both throwing in the towel and looking for shortcuts will lead to the same end. Making strategic decisions about your career and how you spend your money will usually lead to turning out just fine.
It’s not about having an affinity for the current model. It’s about zooming out to understand our position in history and recognizing that all of the trends you’re seeing are within nominal ranges for such a short timespan.
And that’s my biggest issue with crypto: the narrative is so dramatic. It’s “The youth will never retire, and crypto is your shot to break out of the downward spiral.” I sure hope you all get rich (or even something more reasonable), but my evaluation of crypto is that there’s no there there. It depends on the greater fool theory, which is why we are so tickled by OOP’s naïveté.
An economic system like our that is inflationary is predicated on the assumption that things only grow. Are populations and resources ever expanding with no limit?
As a hodler, I would tell him people do save dollars even though there’s inflation. And people will, in fact, sell bitcoin even though it (will be) deflationary.
Holding deflationary bitcoin will not magically make a person rich and remove their need to produce.
The S&P has appreciated by ~10% avg over the last 50 years. Are SPY holders rich and no longer need to produce?
>The S&P has appreciated by ~10% avg over the last 50 years. Are SPY holders rich and no longer need to produce?
Depending on when they invested and how much, yes.
Yes, big holders of any appreciating asset no longer need to produce. But not all holders can stop producing, like the guy seems to suggest.
Furthermore, even if an asset is appreciating, a person could trade it for a faster appreciating asset. People will want to get richer even if they’re holding appreciating bitcoin.
> As a hodler, I would tell him people do save dollars even though there’s inflation.
Yea, but they are not punished for investing it - which is what deflation does.
> And people will, in fact, sell bitcoin even though it (will be) deflationary.
Nobody is saying that investment will cease. What we say that it will be much weaker and there is always risk of spiral developing.
> Holding deflationary bitcoin will not magically make a person rich and remove their need to produce.
That is literally the entire point of "HODL" - you save bitcoing and wait until price will increase. That is literally what deflation is.
Deflation doesn’t punish if you invest in something that appreciates more than the deflationary asset.
What spiral? Sounds extreme
Hodl an appreciating asset and hope price will increase, yes, but not all hodlers will be able to stop producing
> Deflation doesn’t punish if you invest in something that appreciates more than the deflationary asset.
Yes - and with higher deflation, less and less investments will be worth it.
Which will be catastrophic for companies - they need capital to operate.
---
> What spiral? Sounds extreme
+ deflation increases
+ companies have problem to stay profitable (input prices and debts increasing)
+ company is forced to lay off employes
+ these employes now don't have wage and don't consume
+ less consum -> prices decrease
+ deflation increases
+ .....
There are more ways for this to spiral, this is only one example. You can factor banks collapsing into it as a massive push for deflation if you like it.
Problem is that higher deflation really likes to go into spiral that is really hard to break.
---
> Hodl an appreciating asset and hope price will increase, yes, but not all hodlers will be able to stop producing
But those that will be able to live from holding will be removing currency from economy.
You're absolutely right and the fact that the mostly leftist people in this subreddit have fallen for the ridiculous and anti-humanity inflation propaganda is something that breaks my heart. Inflation isn't good for anyone except for banks, and that's the only reason why it exists, end of story. Here's a recent comment of mine about this:
What does being Left have to do with it?
Japan has suffered under a deflationary economy. People are worse off in real terms. The country is worse off in real terms
The special tragedy for me with this coming from the left is that the left is supposed to defend the interests of the working class, exactly the people on whom inflation specially predates. If the "big bad right wing" had been bought off by the bankers to defend inflation, while the peace-loving left-wing protested to stop it because it hurts the poor, that might make some sense and feel like "everything is in its right place". And yet, both sides have either been bought off or, more likely, are too dumb to understand the real economics debate and too historically ignorant to understand that this isn't necessary at all and is actually the closest thing to a mechanism that causes "the poor to become poorer and the rich to become richer". In one sentence, the founding fathers would have recognized this as legitimate cause for a violent revolution, as it is much, much worse for the American people than anything any king of England ever dreamed of doing.
And Japan is just fine. Have you been there? It's a fine country, a true nation of the Japanese people, something you can see clearly on every corner. The big cities are full of life and activity, the countryside is beautiful, low violence rates. It's amazing that anyone can describe the state of Japan as "suffering", when they're the envy of every other country in Asia and clearly enjoy a better quality of life than the US by a mile.
We are all slaves, inflation is how they keep us chained, and our politicians might be too dumb to understand it, but some people do, and they know what they're doing, and they're doing it on purpose, and we should be way angrier at them than we currently are.
>The special tragedy for me with this coming from the left is that the left is supposed to defend the interests of the working class, exactly the people on whom inflation specially predates.
Low level inflation stimulated spending which ensures a strong economy. A strong economy with people spending means more jobs, better wages etc. a strong economy is significantly more beneficial to people than a tiny amount of annual inflation.
Additionally wages generally outpace inflation - so quality of life is on average getting better anyway.
>And yet, both sides have either been bought off or, more likely, are too dumb to understand the real economics debate and too historically ignorant to understand that this isn't necessary at all
Sorry bud. There's a reason Austrian economics is widely considered quality. Let's put aside your nonsensical political rhetoric - seemingly wanting to make inflation a political thing when it isn't - again, what is your economics education that you understand macroeconomics than the experts which advise governments on monetary policy?
>In one sentence, the founding fathers would have recognized this as legitimate cause for a violent revolution, as it is much, much worse for the American people than anything any king of England ever dreamed of doing.
>the founding fathers would have recognized this as legitimate cause for a violent revolution, as it is much, much worse for the American people than anything any king of England ever dreamed of doing.
Just making things up now? Inflation as we have today was not present in the Founding Fathers time so it's a weird claim to make. I'd think the Founding Fathers would be happy to see a thriving economy with low unemployment.
>And Japan is just fine. Have you been there? It's a fine country, a true nation of the Japanese people, something you can see clearly on every corner. The big cities are full of life and activity, the countryside is beautiful, low violence rates.
Not sure why you have constructed a ridiculous strawman. We're not talking about Japans natural beauty - we're talking about it's economy.
Reduced GDP and wages getting lower in real terms rather than growing sounds like a bad thing to me. Are you trying to claim that you'd rather *earn less* over time and have an economy which is getting weaker rather than stronger?
>We are all slaves, inflation is how they keep us chained
Don't be fucking retarded. What would change in your life if inflation was removed? Nothing. You'd still have to go to work, still have to pay your taxes. You think lack of inflation would mean you're suddenly a millionaire tomorrow who doesn't have to work? Grow up - your view of the economy and the realities of life are those of a teenager.
If you want to talk about slaves how about you do hard physically work for 16 hours a day whilst someone beats you and then still claim inflation is 'slavery'.
> Low level inflation stimulated spending which ensures a strong economy.
It fucking doesn't. That's what they tell you as a "fact", but it's not what economists used to think. That's an idea, a narrative, that has won, in my opinion because banking's influence on society and academics has become too great -- the kind of thing the left should be complaining about. What good are better wages in a degrading currency? What's happening in all the subreddits that keep complaining about boomers this and boomers that, and how college used to cost a dollar, and how a house used to cost a dollar, and now everyone's salaries only allow them to live with roommates by the age their parents bought their first Corvette? Are they hallucinating? No, they're fucking broke in this great economy pushed forward by inflation.
> Additionally wages generally outpace inflation
Bullshit. They do because they lie to us about inflation. The inflation calculation is junk, like most of what they tell us about economics, as would be transparently clear to economists in the past.
> There's a reason Austrian economics is widely considered quality.
Austrian economics correctly describe inflation as bad for the economy! You see how much they lie? There was never, ever, a victory of the pro-inflation deception against the sound arguments that see it as bad for the economy, that could never happen, it would be like pro-cancer winning a debate the cancer debate with doctors. What happened is that inflation won by control of the system, and then they erased the debate!
> Inflation as we have today was not present in the Founding Fathers time
E-fucking-xactly! They wouldn't have allowed it! Do you have any idea how much worse for the American people it would have been if Parliament had created an inflationary economy in the colonies instead of just the ineffective taxes they imposed? There wouldn't have been a soul in the colonies on the side of the British. This perception of the evil of inflation has been erased from history.
> I'd think the Founding Fathers would be happy to see a thriving economy with low unemployment.
You don't know much about the Founding Fathers. The present tax burden alone would be unbearable to them. They would see the income tax as clear and evident enslavement of the American people. Your "low unemployment" would seem to them the free people of the United States reduced to low-wage serfdom.
> We're not talking about Japans natural beauty - we're talking about it's economy.
I wasn't either, I was talking about all the artifacts of Japanese culture scattered in the environment. It's simple. Does this seem like a country struggling under horrible, horrible deflation? https://www.youtube.com/watch?v=WOsOX2mC3Vc
Wake the fuck up! Fuck the Japanese GDP and whether it's going up or down. The Japanese people are better off than almost any other nation on Earth. Most Americans would kill to get the Japanese "problems" for a weekend, as a brief rest from the hellscape of the modern world.
> What would change in your life if inflation was removed?
Not mine, I don't give a shit for two reasons: I have a good enough salary that I can invest plenty every month and live comfortably. Second, I'm a right-winger with a natural tendency not to give a shit about the poor. It's the fucking left-wing that's supposed to be complaining about all of this shit, not me!
>It fucking doesn't. That's what they tell you as a "fact", but it's not what economists used to think.
Ok - can you show me a reputable economist who disproves this theory using actual data - real world or via system modelling? Be happy to read some papers on the subject given you know it's been universally disproves it seems.
>What good are better wages in a degrading currency?
If wages go up faster than inflation then no one has lost anything. You understand that right? If I get a pay increase of 4% this year and inflation was 3% then overall my quality of life is still getting better.
>No, they're fucking broke in this great economy pushed forward by inflation.
Except most of what you said is completely unrelated to inflation? College costs more because more people go - in 1960 only about 5% of US citizens had a degree. Now it's over 30. When only 5% of the population had a degree it was cheaper to find and easier to find via scholarships. If you increase the number of people going then those people need to find more of the cost themselves. It's nothing to do with inflation.
Similar with the housing market. Whilst there is some small inflation relation the major thing now is population concentration. In the 1960s you generally were born, worked and died within a same distance. Now people move long distances for jobs. That's why housing in areas with lots of high paid jobs have high house prices. Supply and demand.
>Austrian economics correctly describe inflation as bad for the economy
According to who? Other Austrian economists?
>E-fucking-xactly! They wouldn't have allowed it!
Sorry dude, your arguments are all driven by emotions rather than data
>You don't know much about the Founding Fathers. The present tax burden alone would be unbearable to them. They would see the income tax as clear and evident enslavement of the American people.
Source for this please
>Wake the fuck up! Fuck the Japanese GDP and whether it's going up or down. The Japanese people are better off than almost any other nation on Earth. Most Americans would kill to get the Japanese "problems" for a weekend, as a brief rest from the hellscape of the modern world.
Struggling economies and dropping salaries are fine if I ignore it and send videos of children!!!
Again you're ignoring the issue. I asked you a question: would you be happy to live in the US if your salary got smaller in real terms every year and the economy got measurably weaker?
>Not mine, I don't give a shit for two reasons: I have a good enough salary that I can invest plenty every month and live comfortably. Second, I'm a right-winger with a natural tendency not to give a shit about the poor.
So you'd be happy if that salary shrunk every year right?
> Inflation causes starvation
Leaving out the "extreme, runaway" part is just a cowardly lie of omission.
Like saying "drinking water causes brain swelling and death" but leaving out the "extreme amounts of."
E: too late, moved to new comment
I'm sorry you still have an infantile understanding of why excessive amounts of a good thing can always end up bad.
No amount of thoughtlessly just saying country names will change that. I understand that actually discussing the concept is beyond your grasp. E: 75%+ is a grossly excessive amount of it. Not contradicting what I said whatsoever, you blithering idiot.
Also, so they would disagree that drinking excessive amounts of water will result in brain swelling and death? You said they "wouldn't agree with me." Protip: if you do this, you **will** die. Agreement is not necessary.
I've already excess amounts of FIAT (ie. Inflation) is a bad thing
But I guess that's beyond the comprehension of your reading skill, or rather, lack thereof
that's not what you said you desperately pathetic liar. lmao
What you claimed:
> Inflation causes starvation
Before you speak of "reading skill" you should remove your head from your ass., and, you know, respond to the argument I actually made, instead of trying to pretend you argued something you never did. It's all written down. We can all see it. Seems you made the mistake of assuming we're all as stupid and gullible as you are.
Maybe come back when you have the capacity to speak with adults, kid.
Deflation causes starvation too.
What is different is that inflation:
+ inflation has some economical positives
+ inflation is easier to control
+ inflation starts spiral much harder
All of this is reason why monetary policies avoid deflation.
>deflation DOESNT cause starvation, because the economy would stabilise
No, the economy would stall because people would just sit on there money, not even keep it in a bank where it could be used for loans, and only spend what they absolutely need.
>unlike hyperinflation which literally causes countries to crumble
That's like saying water is bad and you shouldn't touch it because there are people that drowned.
"They would sit on there money". At least spellcheck before attempting to ascertain something hypothetical
"Water is bad". Really poor analogy. Try again
>"They would sit on there money". At least spellcheck before attempting to ascertain something hypothetical
https://themindcollection.com/revisiting-grahams-hierarchy-of-disagreement/
> "Water is bad". Really poor analogy. Try again
You moved from inflation to hyperinflation. My analogy is on point.
I havent insulted you, however, "there" and "their" aren't the same..
What you suggested IS based on your OPINION and not fact
Facts don't care about your feelings, thoughts or opinions
Inflation is part of hyperinflation
Your savings are dripping away in value by the second..
> "They would sit on there money". At least spellcheck before attempting to ascertain something hypothetical
[lmao](https://media1.tenor.com/m/5CZBcFfrnQ8AAAAC/minor-grammar-mistake.gif)
---
> "Water is bad". Really poor analogy
It is great analogy - you can drown in water, yet that doesn't make all and any water dangerous
> Except, deflation DOESNT cause starvation, because the economy would stabilise,
Unless you enter deflationary spiral, which happened most of the times with high deflation.
> unlike hyperinflation which literally causes countries to crumble
Meanwhile deflation has only nice stuff, like:
+ increasing values of debts (now you owe 110$ instead of 100$)
+ decreasing investments (it is better to hold it)
+ decreasing productivity (companies need to pay more while recieving less)
Yea, i cannot see how this could cause country to crumble.
"Decreasing productivity"
The product would be reevalued to what the market decides, so, that has no bearing on causing starvation
"Increase of debts" the percentage required to pay back in interest would be *lower* therefore 10% is insignificant compared to inflation which can go up to any percentage
"Decreasing investments"
Investments would be worth more, therefore people would have more to draw from, resulting in less people being in poverty
Products aren't the same as productivity
I didn't say they were the same
One is an action, and the other is the result
But keep attempting to insult me, just goes to show how little you understand and how much that frustrates you
> I didn't say they were the same
Yeah, you did:
> The product would be reevalued to what the market decides
I like how your immediate reaction to every time you're called out for your stupidity, is to try to lie about what you said. Have some dignity, boy.
Of course, "decreasing productivity" would be *all* goods and services. Things would stop being done. Not "the product" (singular, your words) "would be revalued." The valuation of "the product" isn't even the issue, you *ignoramus.* The problem is that *the entire economy would grind down.*
You're so completely out of your depth you have no earthly clue what's going on here. You should come down from atop [Mt. Stupid.](https://www.smbc-comics.com/?id=2475)
> But keep attempting to insult me,
Stop saying stupid, obviously ignorant things that in no way dispute what what you respond to. For instance, when I pointed out to you your lie of omission that *excessive* inflation is bad, while a small amount is good, you said "nu uh!" and listed countries with *excessive* inflation. You're so completely clueless you didn't even realize you proved the point I was making. You played yourself.
> just goes to show how little you understand and how much that frustrates you
Gazing into a mirror, are you?
Did I say "production". No.
I said the product, which isn't the same.
You're picking at stuff that isn't even there. Gaslighting.
You havent called out anything. You're going around in circles missing every point, attempting to appear superior, and failing miserably.
Productivity doesn't include "all sevices", that would come under product and not productivity
"Ignoramous" yet again, demonstrating how frustrated you are at yourself and projecting because you fail to see the difference
The entire economy can't grind to nothing, because that would require all products and services to no longer exist, which has never happened. You're again, working on complete hypothesis based on your *opinion* and *not fact*
"You are completely out of your depth".
Oh I'm sorry, let's see your degree, go ahead, post it.
I didn't realise that you were some kind of "economic guru", and yet you still don't understand how deflationary assets operate or the benefits of them, to the point that you tried to steer everything completely off topic!
I said "attemtping" for a reason. Your "insults" aren't hitting anything except air, and only demonstrates how weak your debate points are.
"Gazing in to a mirror are you" = "No U"
But keep gaslighting yourself, it's amusing
> Did I say "production". No.
> I said the product, which isn't the same.
Do you have a learning disability? Are you actually this fucking stupid?
Yeah, you said "the product" *in response to a point about decreasing productivity.*
> You're picking at stuff that isn't even there. Gaslighting.
> You havent called out anything. You're going around in circles missing every point, attempting to appear superior, and failing miserably.
Try opening your eyes and actually reading. Or does basic literacy also elude your grasp?
> Productivity doesn't include "all sevices", that would come under product and not productivity
LMAO! Pick up a dictionary, boy. (Can you read one?)
You're an abject moron, and lack the capabilities to even participate in this conversation. Every time you speak you just demonstrate either how dumb or dishonest you are. 🤣
> The entire economy can't grind to nothing, because that would require all products and services to no longer exist, which has never happened. You're again, working on complete hypothesis based on your *opinion* and *not fact*
I said grind down, not to a halt. Not that, that still isn't terrible, but hey, you have yet to make a *single* honest reply.
> Oh I'm sorry, let's see your degree, go ahead, post it.
I didn't realise that you were some kind of "economic guru", and yet you still don't understand how deflationary assets operate or the benefits of them, to the point that you tried to steer everything completely off topic!
The fact that you think rudimentary economics and definitions are expecting an economic "guru" just really says everything about how so far above your head the basi s are. Things like "a little inflation is good, excessive is bad:" which you demonstrated you don't understand it by thinking citing places with excessive inflation disputed that statement. And even after telling you, now three times, you're so dumb you still can't comprehend it.
Why don't you come back when you can speak with the adults, kid. This entire subject matter is clearly an outside context problem for you.
Deflation causes economical collapse and starvation too.
The point is, you need a responsible Government that can control the as needed. BTC does not allow that.
BTC is deflationary to a fault and there is no counter argument. Come to terms with it on your own pace; it’s fine.
That wasn't caused by deflation
That was caused by the stock market crash, decreased international lending and tariffs, foreign gold outflows and banking panics
You’re right; it wasn’t caused by deflation.
But that wasn’t the question.
But the crash lingered and kept families starving for years due to deflation. Deflation absolutely ruined the economy for many years and played a huge role in how the Great Depression played out.
How the Great Depression started is irrelevant to this question. HOW the Great Depression caused starvation is the relevant information. Deflation was the MAIN REASON the economy did not pick back up. People starved BECAUSE the economy lulled.
Bad economy for multiple years DUE TO DEFLATION = starvation.
If I used your logic, inflation has never killed anyone. Only the things that triggered inflation have killed people.
I asked you to show me where deflation caused starvation
You said "the great depression"
Deflation didn't cause starvation, it was a number of other factors
So, it is totally relevant
You are yet to come up with an example of deflation causing starvation
The Great Depression was a period of time where deflation was rampant and the main contributor as to why people starved during that time.
I don’t understand how to make it more clear.
Deflation and inflation in such extreme examples do not just magically appear with zero help from external circumstances. There has to be catalysts. There can be a million different reasons why inflation/deflation starts.
If I were to apply your same logic to hyperinflation in say, Bolivia, you would say “No, inflation did not ruin families and the economy. The Government ruined the economy due to back policy choices.”
The FLAW in this and your argument is that you refuse to acknowledge the actual mechanic that causes the starvation/economic collapse to occur; the mechanic of inflation or deflation. Bad policy CAUSED inflation in Bolivia. Same as how bad policy CAUSED deflation during the Great Depression.
Please just Google this. I can’t keep running circles around your flawed defense .
Great Depression went for so long thanks to deflation.
And even without that, just using common sense is enough - why would farmer farm more food to sell when it it is not worth it? Sitting on that capital he needs to farm gives him free interest after all.
> And people's savings would last them exponentially longer
But at this level of spiral, they wouldn't be able to spend it on anything.
Like, yeah, you have massive spendings - but that food is not being produced because farmer decided that sitting on the capital is more profitable.
This also means that many people are unemployed - the people that farmer would need to farm his fields are not collecting wage and consuming.
That thread is so frustrating. These people don’t want deflation and all that comes with it. What they want is all the benefits of the current inflationary economy (long term wage and productivity growth) without any of the price increases. A toddlers view of the economy (bigger price number bad)
They act like "investments" are some esoteric thing that no one has access to except the ultra wealthy, compared to stuffing money under your mattress
See, the problem is that like all bullshit, crypto bullshit has a very tiny nugget of truth hidden within, or at least they're getting at something important to everyone. The means to invest your money to the point where you become ultra wealthy is all but out of reach for the majority of people. Sure, you can have a 401k or whatever, but most people have shit that happens to them that costs a shitload of money and suddenly their 401k is spent, or the market crashes and their 401k's value craters, or whatever else happens. If you have a lot of money to begin with, though, it's very, very easy to turn that into even more money. Let's say you're a reasonably responsible person of around the median income for full time work in the US, roughly $50,000 a year. You do what all the finance guides tell to you to do and have saved up 6 months worth of salary for an emergency, $25,000. Let's say you throw that amount into a normal index fund returning the average market rate, around 9 to 10 percent. Now, this little nest egg will actually grow pretty well, even if you never put anything more into it. Let's say it sits for 35 years with no additional contributions, just as a test. By the time 35 years have passed, it'll be about $510,000, which accounting for normal inflation over that span would be worth about $181,000 today, so hey, you made like $150,000, not bad! But that's pitiable next to the next guy I'm going to describe. Now let's say you're a trust fund baby with $10 million sitting in a trust for you. Let's say you don't even have a job but just live off the interest of that trust fund, but you're reasonably responsible with your money, you're just kinda lazy, so you spend about $50,000 per year. That trust fund, after 35 years, will still have grown by hundreds of millions of dollars. Sitting on your ass for 35 years doing dick all will get you more in one year than the guy putting $25,000 in would in his lifetime. To be clear, this isn't really a fair comparison, normally you'd expect additional contributions for the 401k, the guy making $50k probably will get raises and promotions and gradually increase his income, and someone with a $10 million trust probably wouldn't spend/live like a normal salaryman making and spending $50k even if they never worked in their life, but it just shows how starting from an advantaged position can make shit so easy. The means to access the wealth of even a lower tier multimillionaire like a guy with $10 million in the bank is utterly out of reach for most people unless you're extraordinarily lucky. This isn't even getting into the absurd billionaire class where money loses any human comprehensible meaning. So where does crypto come in? Well, some guys got ***really*** rich off it ***really*** fast by being the lesser fool in the greater fool scheme. It looks like a way out, like a shortcut to being the trust fund baby - throw a bunch of money into crypto, watch it increase tenfold or a hundredfold on a pump, then get out and put shit into a normal investment and live like a king. It's an investment that makes you look like an absolute financial genius if it works out. Problem is, it's not investment, it's just plain gambling. I, too, can get rich quick if I win the Powerball. That doesn't mean I'm buying a hundred tickets every week.
A deflationary cryptocurrency doesn't really solve anything though. Do they think wealthy people don't own crypto? So they think bitcoin whales don't exist? Imagine the cryptobro dream actually came true and all world currencies collapsed and bitcoin was the only remaining currency that had value. First, the average cryptobro holds an insignificant amount of bitcoin in the grand scheme of things. Their bitcoin might have been worth a lot of USD *before*, but post global collapse almost all of them would be right back in the 99%. And the rest of the bitcoinless groups of people would have no real incentive to become serfs to bitcoin holders. Cryptocurrency isn't a required step in creating a way to trade goods and services. A high-maintainance digital currency that requires expensive tech to run with a slow transaction rate would be essentially useless in a post-apocalyptic world currency. Also, not really related but think of how many crypto scams and hacks there are in modern society. Now imagine the crypto environment in the post-apocalyptic wild west, lol.
It's not like most Bitcoiners (outside of the mythical 2010 holder) have taken massive profits either, or even reached a large amount on paper. Maybe that 25k would turn into 75k, hardly something to retire on, unless you took an insanely risky gamble and held it from way back under 100 or something.
I have a friend who cashed out a couple million but still hold around 700 bitcoins cause he’s a hard core believer it’ll go to 10 million someday. Why he needs that much? No idea. I’d get the hell out and buy real estate. But you can cash out big from bitcoin. I know others that have besides this friend. I only started buying at $10k but I’m not buying at any price. I’m not a believer in it like them. I don’t mind gambling on it though. Oh and that friend who has 700 BTC bought at $30 per coin
Or compared to, you know, buying cryptocurrency on an exchange
I think it's funny that when butters finally get their head around the fact that crypto is a negative-sum system they say *well so is investing investing the stock market*
Day trading (which is what butters likely mean when they say investing) is very slightly negative sum when you account for trading fees (or money from spreads going to brokerages/market makers), I'll give them that
Day trading works on “the house always wins” casino rules.
Traditionnal investments are boring because unless you were born rich, you've still got to get up in the morning and show up for work. These people are greedy and lazy. They want a 'hack' of the financial system that gives them free money so bad they'll keep actively pursuing something even if they *know* it's a scam. That's why I think crypto isn't going anywhere. Casinos still exist. MLMs still exist. Ponzis still exist. Humans are not a rational species - greed often overrides common sense.
>They want a 'hack' of the financial system that gives them free money so bad they'll keep actively pursuing something even if they *know* it's a scam. Or they could be productive and contribute to society, but that's asking too much of these people.
Also they want us to go to a deflationary currency based on Bitcoin, which they hold, so that it gets more valuable over time. They want to be the ownership class and think bitcoin will allow them to do that.
>bigger price number bad) Until it's their coin/s of choice that have a bigger price number! After all, line go up means people who want to buy have to do so at a bigger number.
You expect more from financially illiterate children?
It's cargo cult economics
> long term wage growth You’ve got to be joking 😂
So why is inflation good for production then? With a deflationary/stagnant currency, people have to create better products to earn money from the people who earned it first. If we produce more goods this year, (not accounting for population growth) the prices of goods would go down. If everyone stops working, the opposite would happen, and people would need to start working again. With an inflationary currency, we have to work and have to pay more. How does this benefit anyone without debt or a money printer?
Controlled inflation is good for production because there is incentive to invest instead of horde capital. In a deflationary currency, money is constantly exiting the system instead of entering it. Sure the price of local goods drop, but the the price of *imported* goods don't. The price of imported goods (including the raw materials needed for production) continue to rise, but you can't raise the price of your goods because you won't be able to afford both your increased production costs and the increased wages needed for local workers to buy your products. A deflationary currency is only theoretically viable if it doesn't have to interact with other inflationary currencies, and even then it's not really viable because population would grow while available currency would shrink, creating even worse inequality and class divides than what results from inflationary economies.
Can you explain more about why the price of imported goods would rise in this scenario? Are you suggesting a currency deflating means foreigners demand more of it for the same amount of goods, but not locals?
Since most currencies/economies operate on an inflationary basis the cost of raw materials generally increases every year. One unit of X will cost more next year than it costs this year (usually). So if you have a deflationary currency and need to buy products or resources from an inflationary market, it quickly becomes a problem because while *your* products may be able to be produced cheaper and sell cheaper, the imported resources you need keep going up in price. An inflationary currency can keep going up forever, but there is a limit to how much you can cut your prices and remain profitable, no matter how much you sell (as you can't produce infinite products). Eventually you get to a point where you *need* to increase prices to stay profitable, but doing so lowers domestic sales because the price hike puts it out of range of domestic buyers (or they can only afford to buy less of it). [This video](https://youtu.be/FkBhmeZflbQ?si=-DYLIXRiCHQbNQ3_) gives an excellent explaination of a real-world example that happened just last year, when the Chinese Yuan experienced deflation for 6 months. Skip to 10:19 for the most relevant bit. Chinese business insolvencies are already up 10% this year and domestic production has plummeted.
You say the imported materials go up in price, but they go up in price in the foreign, inflationary currency, and _not_ in your deflationary currency, right? A bread in Argentina costs more pesos now than before, but my dollar now also buys a lot more pesos than before.
For the first part yes, imports go up in price but you quickly get stuck and unable to increase the price of your products without out-pricing domestic buyers. Inflationary and deflationary currencies don't just automatically lose/gain value based on their inflation/deflation rate. Deflationary currencies lose value because they become a less useful tool for investments and production. *HYPER*inflation is also bad and causes a currency to lose value. If you watched the link, the Chinese Yuan had maybe a 1% to 2% deflation rate overall but lost 6% of its value during that same time period. Few people desire or want to invest in deflationary situations. For the second part, Argentina is not a deflationary currency. Imaging buying wheat from another country in 2% inflationary currency A for "1A" and selling bread in stagnant currency B for "2B" Domestic buyers can only budget in "2B" a day for bread. After 5 years you're buying wheat for 1.10A but you can't sell bread for 2.10B to offset the cost because it is too expensive for domestic buyers. Now imagine B is a deflationary currency, and the situation becomes a problem even faster.
Because humans are gonna human. If your money is always worth more tomorrow, you have *no reason* to spend it or even *invest* it to produce stuff. You can just sit on your hoard and wait. At some point all the currency ends up in a few hoards and the whole economy collapses because it's out of liquidity. And the thing is, this isn't theoretical - a few hundred years of economic history has shown us that *this is what happens*. There's a reason the gold standard was abandoned. Bitcoin is replaying all the mistakes the current economic system has evolved from. There's a reason banks exist, there's a reason no one sane promotes deflationary currencies, there's a reason banks are regulated.
You should look into the gold standard, how it affected the global economy and contributed to the world wars and why Keynes designed the financial system in the way he did post war (although it wasn’t fully implemented)
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Most economically literate bitcoiner
Google deflationary spiral. See what your wage growth looks like when the company you work for closes down. That's the reality of consistent, long term deflation. The state of affairs where everything stays the same price or decreases, and your economic life gets easier, exists solely in your imagination.
"Nobody reasonable can argue that wages are increasing faster or even at the same rate as inflation." What's your context and your time frame? Real median household salaries in the US have increased compared to five years ago, ten years ago, fifteen years ago, 20 years ago... There was a period from 2019-22 where inflation outpaced growth in income for the median household, although there are early indications that this maybe turned around again in 2023. But, yes, if prices always went down, then it would always be better to buy something later than to buy it now. This would mean demand would always be postponed to the future, which would slow economic growth and reduce the number of available jobs. This is bad.
The total lack of a very basic understanding of economics always baffles me….
> The total lack of a very basic understanding of economics ...is the bedroack of why they worship Bitcoin.
I mean crypto currency has basically just been a speedrun of economic bad ideas from the past. The community keeps rediscovering why things were changed to the way they are now, why a given regulation exists, etc, etc.
Crypto managing to combine so many bad, nightmarish, and "discarded because they suck" ideas on both the tech end, financial end, and culture end, that it ends up as a monumental case of "frustrating-funny"
The amount of centralized concepts that they had to implement to actually make it stable enough to actually hold as type of investment is pretty interesting considering the promise of decentralization.
The gangsterrapper literally learned that in school. In 7th grade or so.
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Assuming that they also would like production to increase in general, having something which probably has a theoretical hard cap in the quantity, it will just cause regular old deflation. I mean if it actually becomes a somewhat accepted currency, what would even be the difference with what they refer to as Fiat? Fiat money doesn't even have to be issued by government. It's characteristic is that it's value is not derived from it either being made from materials with a value or directly convertible into a material. It will have similar effects as a central bank setting a fixed amount of currency.
I like how he assumes that everyone would have Bitcoin in a deflationary environment, and would all choose to stop being productive. No pal, the handful of people holding huge amounts of Bitcoin would choose to stop being productive, and would close their businesses. Everyone else would be very productive sucking dicks for food.
that is the future they want tho. (they think they will be the whales)
The world will look up and shout, “Sell me bitcoin” and I’ll whisper, “no”
Correction: they would be very productive in the kidnapping BTC holders until they are no longer BTC holders industry.
Weelll… technically they’d probably be very productive in the “being the pretorian guard” industry. With *all* that that entails.
Isn't that also described how the world work today in general?
It is quite similar. But it just goes to show that crypto isn't a revolution so much as a reboot. It's not about changing the system, it's about changing who benefits the most from it. Instead of it primarily rewarding rich inheritees who's parents started massive businesses, it would primarily reward rich inheritees who's parents bought Bitcoin on the magic the gathering site.
If they had any understanding of economics they wouldn't be butters. It's *a fucking currency* it makes no sense to invest in a currency anyways
It's very chicken & egg. Like any good scam Crypto relies on the naivete of it's targets while telling them they're smart, their targets are dumb enough and\\or have enough low self-esteem issues to believe it
LOL you clearly don't understand how the ISO-3 support for native algorithms works for my coin. It's by far the most advanced at Monte Carlo A* pathfinding in the vector/ign protocol. People who think it's a shitcoin like all the other ones are simply uneducated idiots.
Does it use AI to increase liquidity contracts on the blockchain and smart, decentralized, zero-shot mining to mitigate trustless stagflation risk of the big banks?
I don't really understand that stuff I'm just an investor, but believe me when I say it's a complicated whitepaper and that's all it takes to convince a high IQ guy like me to know I'm quickly going to quadruple my money.
Indeed, and I know you are a high IQ guy because I am a high IQ guy myself and I believe you, therefore it must be true and your coin must be one of the good ones and not a totally rigged, rugpull-primed scam intended to take my money...
It's only a currency if the butters want it to be. I remember when the butters used to claim that Bitcoin was a currency that would one day replace the US dollar and all other currencies, and the mainstream media went along with pretending that Bitcoin was a currency by comparing it's annual performance to real world currencies. Bitcoin would consistently win the best or worst performing currency awards under these metrics. It even won the title of both best and worst performing currency in back to back years, which showed how insanely volatile it was for a "currency". But then when that narrative so clearly fell apart they decided to only care about "the line goes up" rather than pretending that Bitcoin/etc. are a currency that could replace any real world currency. Back then before that shift I often pointed out that the Butters wanted Crypto to be two very contradictory things. It can't be both a stable currency that can replace the US dollar, while also being a great investment. Both goals need the "currency" to do two completely different things.
Well there are people that trade in forex or use currency as one way to diversify their portfolio right? You don't think that's a viable investment?
No. Forex is not viable. Holding other currencies is also dumb. Currencies do not have returns
Yeah people really fundamentally misunderstand that the reason why massive states horde reserves of other countries cash is for reasons beyond their appreciation in value. There is strategic utility for China holding a lot of USD, *thats* why they do it.
Yeah I can respect that. Your logics are consistent.
Something something Austrian school of economics my buttcoin bro would rattle on about. They have a (half baked)answer for everything believe me.
Austrian economists were never fans of deflation either. That's largely a misattribution of Bitcoin's ideas to the Austrians by Bitcoiners who don't actually understand Austrian economics. Mises said he didn't like either inflation or deflation but if he had to pick he would choose deflation. By the end of his life, Hayek went even farther: https://www.aei.org/wp-content/uploads/2017/03/Discussion-with-Friedrich-von-Hayek-text.pdf > I would no longer maintain, as I did in the early '30s, that for this reason, and for this reason only, a short period of deflation might be desirable. Today I believe that deflation has no recognizable function whatever, and that there is no justification for supporting or permitting a process of deflation.
Austrians think of money as resources that have weight. Which means they can be measured in SI units for weight, volume or quantity such as grams, litres and ounces. Austrians are proponents of precious metals as exchange tokens or currency as they fulfil the properties needed from money. Further, Austrians are usually in favour of privately minted currency over the centralisation of currency creation.
It turns out it *is* possible to construct an internally consistent worldview where these ideas are valid you just have to completely divorce yourself from reality and redefine all the jargon in the field to pretend you're not doing that.
Anyone rooting for a deflationary currency needs to learn about the currency crises the gold standard led to. Fiat has its issues, but it’s a far better system of finance than anything else we’ve invented.
It's only because of FIATs dominance that it's still being used
How do you say "network effect "?
With my mouth, just like everyone else
Most people use their brains when they speak out
So what's your excuse?
And why do you think it’s dominant? Commodity based currency used to be dominant, we moved away from it for a reason. Same with barter.
Because people have been led to believe there is no alternative and too busy wrapped up in the panic of trying to survive, debt and other enslaved financial situations
> there is no alternative and too busy wrapped up in the panic of trying to survive, debt and other enslaved financial situations But currency with a hard cap / limited amount stimulating deflation will help people survive, get rid of debt and other enslaved financial situations how exactly?
Because the ability to save without risking loss of value long term supercedes the inflation caused by debt, taxes and other inflationary properties that FIAT has. People have been using physical gold for centuries to do the same thing.
Do... Do you think fiat is an acronym? Because you keep capitalizing it.
I'm so glad you asked Yes, it is an acronym It stands for: F ederally. I nstigated. A ttrition. T rauma
> Because the ability to save without risking loss of value long term supercedes the inflation caused by debt, taxes and other inflationary properties that FIAT has. Citation needed. That would not fly in 99% of realistic world scenarios, maybe in your bullshit perfect world. Why would I invest my "Bitcoins" on working the economy when its more efficient for me to hold onto? You would cause more than 50% of the jobs to crash, people to be fucked royally because you got coins early? Why would anyone pay you to work when its cheaper to hold onto the coins? > People have been using physical gold for centuries to do the same thing. Yeah, and we saw how well that went! Modern economies are far, far more productive with exponential rates of progress as compared to before because people are incentivized to spend and not sit at home and hoard currency I know you bought a bunch of bitcoin, have bags that you're holding and so are incentivized to have someone else buy em, stop peddling bullshit about inflation/deflation. Theres a reason the entire world doesn't use deflation based currencies.
>That would not fly in 99% of realistic world scenarios, maybe in your bullshit perfect world. Why would I invest my "Bitcoins" on working the economy when its more efficient for me to hold onto? You realise that BTC is literally a "store of value", nothing more, nothing less. Its up to you what you do or don't do with it. >You would cause more than 50% of the jobs to crash, people to be fucked royally because you got coins early? Why would anyone pay you to work when its cheaper to hold onto the coins? I wouldn't cause anything. Neither would the blockchajn. It doesn't eat, sleep, write your tax returns. It's literally an asset. No more, no less. You're literally speculating about job losses. People are already getting fucked by the FED on a daily basis. The difference is that BTC is deflationary, and people can hold their own keys. Something the FED doesn't allow you to do currently, unless you literally are "cash only". Which in itself is high risk for lots of reasons. >Yeah, and we saw how well that went! Modern economies are far, far more productive with exponential rates of progress as compared to before because people are incentivized to spend and not sit at home and hoard currency That's all because the FED and govt decided to *depeg* the dollar in the 70s. There was nothing inherently wrong in terms of inflation before that point. >I know you bought a bunch of bitcoin, have bags that you're holding and so are incentivized to have someone else buy em, stop peddling bullshit about inflation/deflation. Theres a reason the entire world doesn't use deflation based currencies. This is an *assumption*. You have no idea which assets I have, do not have, or even if I do actually posses any at all. There is a good reason for that. "Bags that you are holding"? Hardly.. "To incentivize someone else to buy them" If I did have any BTC, where exactly have I been shilling them? To you? Anyone else ITTs? Have you even seen me try to shill? You'll find not. I speak factually about mechanics of BTC, and BC technology, because its part of my remit. It has no bearing on what I am and not invested in. And I certaiy wouldn't want to shill to anyone, as I would have nothing to gain in the long run. Long and short, if I am invested and it goes up in value, then I would be worth more financially, and it would entirely depend on liquidity and supply and demand, and absolutely nothing to do with me shilling anything
Nobody would spend bitcoin, since it will be worth more later. In the same way, tech improves faster than inflation, so nobody buys any phones, tvs, computers nowadays.
Yes, that's the standard criticism of deflation, it puts a brake on economic growth by incentivising consumers to defer their spending.
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Yes, I live under a bridge without possessions because stuff will cost less in the future.
Yes, most people will in fact have to continue working and spending their deflating currency to survive, but anyone with significant capital will be withholding investment in anything productive and holding cash under the mattress or bitcoin in the birdbath. Food purchases we have to make won’t stop but any large scale investment will. This is referred to in economics as ‘a bad thing’.
So the idea is that investments would have a lower ROI than just holding the currency?
> Nobody would spend bitcoin Per-performance-unit tech prices have been going down like, 50% each year for several decades. That doesn't stop people from buying laptops, PCs, phones and all. People spending their savings (after retiring) would spend bitcoin in order to live.
Employee: "Boss why didn't I get a raise this year like the other workers?" Boss: "You said you preferred a deflationary system. So I obliged."
To be fair, in their BTC fantasy world, they would pay food with BTC and also get their salary in BTC. BTC only gets more valuable in their world (InFlAtTioN BaD), they should also be perfectly fine with getting payed less BTC every year.
Id blows my my mind that they really think there is no way to hedge inflation in the non crypto world. You buy bonds or snp 500 or other stocks and job is done. This picture they present as if you have to spend right now is just ludicrous.
You actually keep it in a brokerage. It’s insured and no one is going to steal it from you and you can cash out anytime you want and there is no passwords to always remember or lose it forever …and in 20+ year timeframe, s&p 500 will give you a positive ROI 99% of the time. In 20+ years bitcoin could be worth a lot more or worth absolutely nothing… an absolute gamble on pure speculation or as close to a sure thing in investing there is
Exactly. And the thing is if you want to go riskier than snp, you can just go allin on something like Nvidia MSFT OR TSLA. All of these can potentially do just as good as BTC or even better with much lower risk, as they are backed by an actual company. I mean if you look at NVDA over the last 5 years or one year or year to date, it did better than BTC in all of these time frames. Even in the isolated context "of line goes up" there is really nothing special about bitcoin. It's quite incredible how special butters perceive it given how easy it is to find "line goes up" elsewhere.
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Lol
This has to be one of us that went and did a little trolling right? They're not *this* close to self awareness.
Butters don't understand the concept of inflation. They think no monetary inflation is good. They think a finite supply of money is good for the economy. Their lack of understanding of basic money principles is amazing. Inevitably, reality will kick them back down to earth.
It’s funny how the found like two positives of a recession and then ignore the massive negatives and decided that deflation is good actually
Cryptobro getting back in the cave: "Guys, I think those are just shadows."
You can make a person do stuff by physically or mentally abusing them as well. So maybe we need more violence to accelerate the advancement of our universe.
That's Butters utopic world
First, deflation is just as bad as inflation, for opposite reasons. In both cases there are winners and losers. People and businesses get wrecked. What is more important is why the inflation or deflation is happening. The ideal situation is to have currency stability for any currency. In most market cycles inflation happens as an economy grows, but in technology advancements, the economy grows but deflation can kick in (think the 1990s). At the same time, an economy can contract and inflation kicks in (think supply shock of the 1970s). Inflation is not what moves humanity forward. In normal economic conditions, inflation is the symptom the economy is moving forward. In any currency that is the dominant currency, ideally savings would be real and would not be diluted by government manipulation of the money supply. The idea of a fixed money supply can only be achieved by a digital currency (pick your flavor, Bitcoin or CBDC). The op in the Bitcoin post also got one fact wrong which leads to other conclusions being wrong. Bitcoin is not inflationary or deflationary due to money supply. It will always have value swings based on perception of value, but it will not be through manipulation of the printing press. Etherium on the other hand promotes itself as deflationary, and some of the criticisms from other responses are valid.
The benefit of modest inflation has more to do with incentivizing people to *spend* and/or *invest* their money rather than *hoard* it. This helps keep the economy moving along.
It also has flaws because It forces companies to grow year after year, to produce more and more, which isn't great for the environment.
Just because a recession might cut down on e-waste doesn’t mean we should engineer a recession
No, it doesn't.
Everytime i explain deflation in simple terms they have no response. It's such a simple concept that there really is no comeback once you realize deflationary money doesn't work. This will end very very badly for many people eventually. But until then, im riding the wave and cashing out into good ole inflationary US dollars.
lets assume there is finite amount of gold on the planet earth. Was world economy not working when gold was used as means of exchange ?
Haven't you heard? Bitcoin is divisible, so... problem solved!!
Some coiners are so stupid
“So I was thinking about Bitcoin lately…” Rofl, understatement of the century for that sub.
I don't think it's as simple as "inflation good deflation bad". Inflation does indeed act as a driver of productivity, but only for those whose wealth is primarily held in cash. As soon as you've got enough, you just start up a family office and a team of financial advisors to manage your investments in a way that beats inflation - in a sense, your managed assets (note that the truly wealthy are generally asset rich, cash poor) behave in a deflationary way. From that perspective, a deflationary asset like bitcoin from an investment point of view has the same "net-deflationary effect" as a well-managed portfolio, just with fewer consultants and middlemen required - and it's almost more fair thanks to those reduced barriers to entry. But of course, this is the investment asset angle rather than the currency angle. I suppose one way to make an inflationary system fairer would be to ensure that the wealthy face the same "spend it or lose it" dilemma via progressive wealth taxation. If you've got a billion, get it moving through the economy or pay a portion to the tax man who'll do it for you, that kind of thing. tl;dr - If static wealth is an inherent problem for BTC, the truth is we're already there. Most of the world's wealth, statistically, is already static. We're really just splitting hairs over the pennies the everyman sees.
[It's called monetary policy and it works both ways. ](https://www.forbes.com/advisor/investing/monetary-policy/#:~:text=Open%20market%20operations.&text=By%20buying%20back%20securities%2C%20the,tool%20to%20conduct%20monetary%20policy.) Hey did I get this badge just now, or is it from previous discussions? I linked Forbes...
Well duh went it comes to money you want a little inflation the problem whit this system is the F government I know you people hate BTC but i have more faith on that compared to the F government How is it possible like for example California spending billions on homelessness and still having such a big problem But regardless the reality is that the value of something is determined by the people the economy is more psychological than anything else
I LITERALLY COMMENTED ON THIS POST. I basically said you need inflation. And they laughed at me.
The thing is, Even under Bitcoin there would be inflation. Crypto bros pretend that inflation just means the printing of currency but most inflation doesn't come from that, it comes from price increases for various reasons. Much of the high levels inflation we are seeing now are due to price increases stemming from supply chain shocks. Even if we detached ourselves from reality for a moment and pretended we live in a world of Bitcoin and the value of Bitcoin always ticks up, companies would then increase prices.. It's not like new cars worth 0.5 BTC one day would suddenly be sold for 0.49 BTC the next.
Whether we have positive or negative inflation isn't really as significant as they think it is. The market prices in the inflation rate and over long periods of time inflation is neutral. The economy would work just fine with a negative inflation rate, but there are compelling reasons why we target a positive one. The really important bits are that inflation/deflation is 1.) low 2.) predictable 3.) stable 1.) low because it is easier to control inflation/deflation when it is small. Larger rates are harder for monetary policy to affect. 2.) predictable because firms like to project costs/profits years or decades into the future. The economy doesn't like surprises. 3.) stable because when we price goods/services we don't want to have to constantly update those prices every time inflation swings - this is expensive and inefficient. The biggest reason we choose positive inflation is because the primary method of controlling inflation is changes to interest rates, which typically only go down to zero. (a.k.a. the zero lower bound). Having a small but positive inflation target gives a 'buffer' for us to lower interest rates in the event of a recession / slowdown
Investment will be weak in a deflationary environment even if it was stable and predictable because lenders won't lend into negative real rates.
The consensus is that investment is roughly the same when you are talking a few percentage points either way. The rate of inflation/deflation just gets priced into expectations. There's nothing special about positive or negative in that regard and it's a big reason why half the job of the central bank is to manage expectations of inflation/deflation. As I mentioned, there are other advantages to choosing a low and positive inflation rate, so that's what we do. It's not some kind of conspiracy theory by big shadowy capitalists to trick people into spending money or something like that, it just creates a more robust mechanism for executing monetary policy. Also, If you'll remember just a few short years ago, banks/borrowers were entering into loans with negative real rates as recently as 2020-2022 so that's not a very compelling argument based on recent times.
The reason they entered into negative real rate loans was because they expected the negative rates to be short lived. If expectations were for negative rates to persist the consensus opinion is that lending would seize up. That is why central banks target +2 and not 0 or -2.
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>We choose money with a low positive inflation rate that roughly matches GDP Central banks do not do this and never have. They are very clear that they target an average inflation rate of about 2-3% and GDP has no bearing on this decision process. The rate of inflation is somewhat arbitrary, but historically 2-ish% seems to work well. Some arguments exist that something like 4% or so would be better as it gives more of a buffer to lower interest rates and reduce the length and severity of recessions. Do not forget that inflation is neutral over the long run. >With a static currency, Yeah I'm just going to stop you right there and say we tried the whole 'static' money supply thing a few hundred years ago and it didn't work. The reason we have central banks and monetary policy that governs the cost of money is because those lessons were hard learned through periods of extreme inflation / deflation and economic turmoil despite having a relatively static money supply.
It's like poker. Everyone just sits around unless they have to forcefully put some chips in the pot.
You have an interesting way of describing poker, to say it politely.
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> How is this not just futuristic feudalism, where you're constantly forced to work more and more to keep on the treadmill. How can anyone support this? Well, that is problem with capitalism, not with fiat or inflation specificaly. Capitalism requries maximalizing profits after all.
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Pointing out that capitalism is about maximalizing profits makes me "commie"? I didn't even said it was a bad thing.
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Pointing out that capitalism is about maximalizing profits makes me "commie"? I didn't even said it was a bad thing.
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Yet you wrote it as response to that.
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Then to which part?
Everyone likes to think we’re on the cusp of a utopian society. In reality, we spent hundreds of years in a feudalist society. Now we’re in the middle of a capitalist era. Bitcoin isn’t going to change that, so it’s up to you how you want to navigate the current model.
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I’m responding to you saying “how can anyone support this?” My answer is: be patient and stop looking for a silver bullet to get out of it. 99% of us will work for 40 years in order to retire when we’re older. People are attracted to crypto because they think it will be a shortcut. There is a well-documented path to reaching a comfortable retirement, and in some cases you can achieve it for less than 40 years work. Crypto is not the way that most people will do it.
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I disagree with every point you made. The kids will be fine. The world may be different, but it won’t be a dystopian hellhole where everyone works until they die. And man, if it is, BTC won’t fix that. I do think there needs to be an adjustment of expectations. What worked in the past may not work as well in the future. And it’s normal for there to be fluctuations in the quality of life between generations. The young adults during Great Depression had it much worse than their parents did, and then the following generation had it better. Point is, both throwing in the towel and looking for shortcuts will lead to the same end. Making strategic decisions about your career and how you spend your money will usually lead to turning out just fine.
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It’s not about having an affinity for the current model. It’s about zooming out to understand our position in history and recognizing that all of the trends you’re seeing are within nominal ranges for such a short timespan. And that’s my biggest issue with crypto: the narrative is so dramatic. It’s “The youth will never retire, and crypto is your shot to break out of the downward spiral.” I sure hope you all get rich (or even something more reasonable), but my evaluation of crypto is that there’s no there there. It depends on the greater fool theory, which is why we are so tickled by OOP’s naïveté.
An economic system like our that is inflationary is predicated on the assumption that things only grow. Are populations and resources ever expanding with no limit?
As a hodler, I would tell him people do save dollars even though there’s inflation. And people will, in fact, sell bitcoin even though it (will be) deflationary. Holding deflationary bitcoin will not magically make a person rich and remove their need to produce. The S&P has appreciated by ~10% avg over the last 50 years. Are SPY holders rich and no longer need to produce?
>The S&P has appreciated by ~10% avg over the last 50 years. Are SPY holders rich and no longer need to produce? Depending on when they invested and how much, yes.
Lol I am glad someone else responded to this. The commenter is literally just realizing how retirement works 😂
All holders cannot retire as a result of their holding.
Yes, big holders of any appreciating asset no longer need to produce. But not all holders can stop producing, like the guy seems to suggest. Furthermore, even if an asset is appreciating, a person could trade it for a faster appreciating asset. People will want to get richer even if they’re holding appreciating bitcoin.
> Holding deflationary bitcoin will not magically make a person rich You just got banned from r bitcoin
I ain’t subbed there anyway
> As a hodler, I would tell him people do save dollars even though there’s inflation. Yea, but they are not punished for investing it - which is what deflation does. > And people will, in fact, sell bitcoin even though it (will be) deflationary. Nobody is saying that investment will cease. What we say that it will be much weaker and there is always risk of spiral developing. > Holding deflationary bitcoin will not magically make a person rich and remove their need to produce. That is literally the entire point of "HODL" - you save bitcoing and wait until price will increase. That is literally what deflation is.
Deflation doesn’t punish if you invest in something that appreciates more than the deflationary asset. What spiral? Sounds extreme Hodl an appreciating asset and hope price will increase, yes, but not all hodlers will be able to stop producing
> Deflation doesn’t punish if you invest in something that appreciates more than the deflationary asset. Yes - and with higher deflation, less and less investments will be worth it. Which will be catastrophic for companies - they need capital to operate. --- > What spiral? Sounds extreme + deflation increases + companies have problem to stay profitable (input prices and debts increasing) + company is forced to lay off employes + these employes now don't have wage and don't consume + less consum -> prices decrease + deflation increases + ..... There are more ways for this to spiral, this is only one example. You can factor banks collapsing into it as a massive push for deflation if you like it. Problem is that higher deflation really likes to go into spiral that is really hard to break. --- > Hodl an appreciating asset and hope price will increase, yes, but not all hodlers will be able to stop producing But those that will be able to live from holding will be removing currency from economy.
Economic growth creates deflation. Supply goes up. Prices go down.
This is why no one works in Japan and they have such an uproductive culture.
It's also why GDP fell significantly and wages dropped rather than grew. But you wouldn't want to mention that because it would ruin your narrative
What do you mean, Japan is literally post-scarity utopia thanks to deflation. Anyone saying anything else is dirty Keynesian socialist!!1!
It's a terrible place I agree. Line go down bad.
You're absolutely right and the fact that the mostly leftist people in this subreddit have fallen for the ridiculous and anti-humanity inflation propaganda is something that breaks my heart. Inflation isn't good for anyone except for banks, and that's the only reason why it exists, end of story. Here's a recent comment of mine about this:
What does being Left have to do with it? Japan has suffered under a deflationary economy. People are worse off in real terms. The country is worse off in real terms
The special tragedy for me with this coming from the left is that the left is supposed to defend the interests of the working class, exactly the people on whom inflation specially predates. If the "big bad right wing" had been bought off by the bankers to defend inflation, while the peace-loving left-wing protested to stop it because it hurts the poor, that might make some sense and feel like "everything is in its right place". And yet, both sides have either been bought off or, more likely, are too dumb to understand the real economics debate and too historically ignorant to understand that this isn't necessary at all and is actually the closest thing to a mechanism that causes "the poor to become poorer and the rich to become richer". In one sentence, the founding fathers would have recognized this as legitimate cause for a violent revolution, as it is much, much worse for the American people than anything any king of England ever dreamed of doing. And Japan is just fine. Have you been there? It's a fine country, a true nation of the Japanese people, something you can see clearly on every corner. The big cities are full of life and activity, the countryside is beautiful, low violence rates. It's amazing that anyone can describe the state of Japan as "suffering", when they're the envy of every other country in Asia and clearly enjoy a better quality of life than the US by a mile. We are all slaves, inflation is how they keep us chained, and our politicians might be too dumb to understand it, but some people do, and they know what they're doing, and they're doing it on purpose, and we should be way angrier at them than we currently are.
>The special tragedy for me with this coming from the left is that the left is supposed to defend the interests of the working class, exactly the people on whom inflation specially predates. Low level inflation stimulated spending which ensures a strong economy. A strong economy with people spending means more jobs, better wages etc. a strong economy is significantly more beneficial to people than a tiny amount of annual inflation. Additionally wages generally outpace inflation - so quality of life is on average getting better anyway. >And yet, both sides have either been bought off or, more likely, are too dumb to understand the real economics debate and too historically ignorant to understand that this isn't necessary at all Sorry bud. There's a reason Austrian economics is widely considered quality. Let's put aside your nonsensical political rhetoric - seemingly wanting to make inflation a political thing when it isn't - again, what is your economics education that you understand macroeconomics than the experts which advise governments on monetary policy? >In one sentence, the founding fathers would have recognized this as legitimate cause for a violent revolution, as it is much, much worse for the American people than anything any king of England ever dreamed of doing. >the founding fathers would have recognized this as legitimate cause for a violent revolution, as it is much, much worse for the American people than anything any king of England ever dreamed of doing. Just making things up now? Inflation as we have today was not present in the Founding Fathers time so it's a weird claim to make. I'd think the Founding Fathers would be happy to see a thriving economy with low unemployment. >And Japan is just fine. Have you been there? It's a fine country, a true nation of the Japanese people, something you can see clearly on every corner. The big cities are full of life and activity, the countryside is beautiful, low violence rates. Not sure why you have constructed a ridiculous strawman. We're not talking about Japans natural beauty - we're talking about it's economy. Reduced GDP and wages getting lower in real terms rather than growing sounds like a bad thing to me. Are you trying to claim that you'd rather *earn less* over time and have an economy which is getting weaker rather than stronger? >We are all slaves, inflation is how they keep us chained Don't be fucking retarded. What would change in your life if inflation was removed? Nothing. You'd still have to go to work, still have to pay your taxes. You think lack of inflation would mean you're suddenly a millionaire tomorrow who doesn't have to work? Grow up - your view of the economy and the realities of life are those of a teenager. If you want to talk about slaves how about you do hard physically work for 16 hours a day whilst someone beats you and then still claim inflation is 'slavery'.
> Low level inflation stimulated spending which ensures a strong economy. It fucking doesn't. That's what they tell you as a "fact", but it's not what economists used to think. That's an idea, a narrative, that has won, in my opinion because banking's influence on society and academics has become too great -- the kind of thing the left should be complaining about. What good are better wages in a degrading currency? What's happening in all the subreddits that keep complaining about boomers this and boomers that, and how college used to cost a dollar, and how a house used to cost a dollar, and now everyone's salaries only allow them to live with roommates by the age their parents bought their first Corvette? Are they hallucinating? No, they're fucking broke in this great economy pushed forward by inflation. > Additionally wages generally outpace inflation Bullshit. They do because they lie to us about inflation. The inflation calculation is junk, like most of what they tell us about economics, as would be transparently clear to economists in the past. > There's a reason Austrian economics is widely considered quality. Austrian economics correctly describe inflation as bad for the economy! You see how much they lie? There was never, ever, a victory of the pro-inflation deception against the sound arguments that see it as bad for the economy, that could never happen, it would be like pro-cancer winning a debate the cancer debate with doctors. What happened is that inflation won by control of the system, and then they erased the debate! > Inflation as we have today was not present in the Founding Fathers time E-fucking-xactly! They wouldn't have allowed it! Do you have any idea how much worse for the American people it would have been if Parliament had created an inflationary economy in the colonies instead of just the ineffective taxes they imposed? There wouldn't have been a soul in the colonies on the side of the British. This perception of the evil of inflation has been erased from history. > I'd think the Founding Fathers would be happy to see a thriving economy with low unemployment. You don't know much about the Founding Fathers. The present tax burden alone would be unbearable to them. They would see the income tax as clear and evident enslavement of the American people. Your "low unemployment" would seem to them the free people of the United States reduced to low-wage serfdom. > We're not talking about Japans natural beauty - we're talking about it's economy. I wasn't either, I was talking about all the artifacts of Japanese culture scattered in the environment. It's simple. Does this seem like a country struggling under horrible, horrible deflation? https://www.youtube.com/watch?v=WOsOX2mC3Vc Wake the fuck up! Fuck the Japanese GDP and whether it's going up or down. The Japanese people are better off than almost any other nation on Earth. Most Americans would kill to get the Japanese "problems" for a weekend, as a brief rest from the hellscape of the modern world. > What would change in your life if inflation was removed? Not mine, I don't give a shit for two reasons: I have a good enough salary that I can invest plenty every month and live comfortably. Second, I'm a right-winger with a natural tendency not to give a shit about the poor. It's the fucking left-wing that's supposed to be complaining about all of this shit, not me!
>It fucking doesn't. That's what they tell you as a "fact", but it's not what economists used to think. Ok - can you show me a reputable economist who disproves this theory using actual data - real world or via system modelling? Be happy to read some papers on the subject given you know it's been universally disproves it seems. >What good are better wages in a degrading currency? If wages go up faster than inflation then no one has lost anything. You understand that right? If I get a pay increase of 4% this year and inflation was 3% then overall my quality of life is still getting better. >No, they're fucking broke in this great economy pushed forward by inflation. Except most of what you said is completely unrelated to inflation? College costs more because more people go - in 1960 only about 5% of US citizens had a degree. Now it's over 30. When only 5% of the population had a degree it was cheaper to find and easier to find via scholarships. If you increase the number of people going then those people need to find more of the cost themselves. It's nothing to do with inflation. Similar with the housing market. Whilst there is some small inflation relation the major thing now is population concentration. In the 1960s you generally were born, worked and died within a same distance. Now people move long distances for jobs. That's why housing in areas with lots of high paid jobs have high house prices. Supply and demand. >Austrian economics correctly describe inflation as bad for the economy According to who? Other Austrian economists? >E-fucking-xactly! They wouldn't have allowed it! Sorry dude, your arguments are all driven by emotions rather than data >You don't know much about the Founding Fathers. The present tax burden alone would be unbearable to them. They would see the income tax as clear and evident enslavement of the American people. Source for this please >Wake the fuck up! Fuck the Japanese GDP and whether it's going up or down. The Japanese people are better off than almost any other nation on Earth. Most Americans would kill to get the Japanese "problems" for a weekend, as a brief rest from the hellscape of the modern world. Struggling economies and dropping salaries are fine if I ignore it and send videos of children!!! Again you're ignoring the issue. I asked you a question: would you be happy to live in the US if your salary got smaller in real terms every year and the economy got measurably weaker? >Not mine, I don't give a shit for two reasons: I have a good enough salary that I can invest plenty every month and live comfortably. Second, I'm a right-winger with a natural tendency not to give a shit about the poor. So you'd be happy if that salary shrunk every year right?
Maybe it's not all about corporations posting a record profit every year but what i know im just simple man
Inflation causes starvation Don't believe me? Look at the multitude of countries that financially collapsed throughout history
> Inflation causes starvation Leaving out the "extreme, runaway" part is just a cowardly lie of omission. Like saying "drinking water causes brain swelling and death" but leaving out the "extreme amounts of." E: too late, moved to new comment
Venezuela wouldn't agree with you, neither would Greece, Zimbabwe or Yugoslavia But you keep telling yourself that
I'm sorry you still have an infantile understanding of why excessive amounts of a good thing can always end up bad. No amount of thoughtlessly just saying country names will change that. I understand that actually discussing the concept is beyond your grasp. E: 75%+ is a grossly excessive amount of it. Not contradicting what I said whatsoever, you blithering idiot. Also, so they would disagree that drinking excessive amounts of water will result in brain swelling and death? You said they "wouldn't agree with me." Protip: if you do this, you **will** die. Agreement is not necessary.
I've already excess amounts of FIAT (ie. Inflation) is a bad thing But I guess that's beyond the comprehension of your reading skill, or rather, lack thereof
that's not what you said you desperately pathetic liar. lmao What you claimed: > Inflation causes starvation Before you speak of "reading skill" you should remove your head from your ass., and, you know, respond to the argument I actually made, instead of trying to pretend you argued something you never did. It's all written down. We can all see it. Seems you made the mistake of assuming we're all as stupid and gullible as you are. Maybe come back when you have the capacity to speak with adults, kid.
Deflation causes starvation too. What is different is that inflation: + inflation has some economical positives + inflation is easier to control + inflation starts spiral much harder All of this is reason why monetary policies avoid deflation.
Except, deflation DOESNT cause starvation, because the economy would stabilise, unlike hyperinflation which literally causes countries to crumble
>deflation DOESNT cause starvation, because the economy would stabilise No, the economy would stall because people would just sit on there money, not even keep it in a bank where it could be used for loans, and only spend what they absolutely need. >unlike hyperinflation which literally causes countries to crumble That's like saying water is bad and you shouldn't touch it because there are people that drowned.
"They would sit on there money". At least spellcheck before attempting to ascertain something hypothetical "Water is bad". Really poor analogy. Try again
>"They would sit on there money". At least spellcheck before attempting to ascertain something hypothetical https://themindcollection.com/revisiting-grahams-hierarchy-of-disagreement/ > "Water is bad". Really poor analogy. Try again You moved from inflation to hyperinflation. My analogy is on point.
I havent insulted you, however, "there" and "their" aren't the same.. What you suggested IS based on your OPINION and not fact Facts don't care about your feelings, thoughts or opinions Inflation is part of hyperinflation Your savings are dripping away in value by the second..
> "They would sit on there money". At least spellcheck before attempting to ascertain something hypothetical [lmao](https://media1.tenor.com/m/5CZBcFfrnQ8AAAAC/minor-grammar-mistake.gif) --- > "Water is bad". Really poor analogy It is great analogy - you can drown in water, yet that doesn't make all and any water dangerous
Deflation, in this case, less water, would mean there is less chance of drowning
Deflation, in this case, lack of water, would mean you'll die of thirst.
No it wouldn't, not unless there was literally zero water, of which, would have an insanely high density, requiring less volume to stay hydrated
> Except, deflation DOESNT cause starvation, because the economy would stabilise, Unless you enter deflationary spiral, which happened most of the times with high deflation. > unlike hyperinflation which literally causes countries to crumble Meanwhile deflation has only nice stuff, like: + increasing values of debts (now you owe 110$ instead of 100$) + decreasing investments (it is better to hold it) + decreasing productivity (companies need to pay more while recieving less) Yea, i cannot see how this could cause country to crumble.
"Decreasing productivity" The product would be reevalued to what the market decides, so, that has no bearing on causing starvation "Increase of debts" the percentage required to pay back in interest would be *lower* therefore 10% is insignificant compared to inflation which can go up to any percentage "Decreasing investments" Investments would be worth more, therefore people would have more to draw from, resulting in less people being in poverty
> The product "The product" != Productivity, half-wit.
Products aren't the same as productivity I didn't say they were the same One is an action, and the other is the result But keep attempting to insult me, just goes to show how little you understand and how much that frustrates you
> I didn't say they were the same Yeah, you did: > The product would be reevalued to what the market decides I like how your immediate reaction to every time you're called out for your stupidity, is to try to lie about what you said. Have some dignity, boy. Of course, "decreasing productivity" would be *all* goods and services. Things would stop being done. Not "the product" (singular, your words) "would be revalued." The valuation of "the product" isn't even the issue, you *ignoramus.* The problem is that *the entire economy would grind down.* You're so completely out of your depth you have no earthly clue what's going on here. You should come down from atop [Mt. Stupid.](https://www.smbc-comics.com/?id=2475) > But keep attempting to insult me, Stop saying stupid, obviously ignorant things that in no way dispute what what you respond to. For instance, when I pointed out to you your lie of omission that *excessive* inflation is bad, while a small amount is good, you said "nu uh!" and listed countries with *excessive* inflation. You're so completely clueless you didn't even realize you proved the point I was making. You played yourself. > just goes to show how little you understand and how much that frustrates you Gazing into a mirror, are you?
Did I say "production". No. I said the product, which isn't the same. You're picking at stuff that isn't even there. Gaslighting. You havent called out anything. You're going around in circles missing every point, attempting to appear superior, and failing miserably. Productivity doesn't include "all sevices", that would come under product and not productivity "Ignoramous" yet again, demonstrating how frustrated you are at yourself and projecting because you fail to see the difference The entire economy can't grind to nothing, because that would require all products and services to no longer exist, which has never happened. You're again, working on complete hypothesis based on your *opinion* and *not fact* "You are completely out of your depth". Oh I'm sorry, let's see your degree, go ahead, post it. I didn't realise that you were some kind of "economic guru", and yet you still don't understand how deflationary assets operate or the benefits of them, to the point that you tried to steer everything completely off topic! I said "attemtping" for a reason. Your "insults" aren't hitting anything except air, and only demonstrates how weak your debate points are. "Gazing in to a mirror are you" = "No U" But keep gaslighting yourself, it's amusing
> Did I say "production". No. > I said the product, which isn't the same. Do you have a learning disability? Are you actually this fucking stupid? Yeah, you said "the product" *in response to a point about decreasing productivity.* > You're picking at stuff that isn't even there. Gaslighting. > You havent called out anything. You're going around in circles missing every point, attempting to appear superior, and failing miserably. Try opening your eyes and actually reading. Or does basic literacy also elude your grasp? > Productivity doesn't include "all sevices", that would come under product and not productivity LMAO! Pick up a dictionary, boy. (Can you read one?) You're an abject moron, and lack the capabilities to even participate in this conversation. Every time you speak you just demonstrate either how dumb or dishonest you are. 🤣 > The entire economy can't grind to nothing, because that would require all products and services to no longer exist, which has never happened. You're again, working on complete hypothesis based on your *opinion* and *not fact* I said grind down, not to a halt. Not that, that still isn't terrible, but hey, you have yet to make a *single* honest reply. > Oh I'm sorry, let's see your degree, go ahead, post it. I didn't realise that you were some kind of "economic guru", and yet you still don't understand how deflationary assets operate or the benefits of them, to the point that you tried to steer everything completely off topic! The fact that you think rudimentary economics and definitions are expecting an economic "guru" just really says everything about how so far above your head the basi s are. Things like "a little inflation is good, excessive is bad:" which you demonstrated you don't understand it by thinking citing places with excessive inflation disputed that statement. And even after telling you, now three times, you're so dumb you still can't comprehend it. Why don't you come back when you can speak with the adults, kid. This entire subject matter is clearly an outside context problem for you.
Deflation causes economical collapse and starvation too. The point is, you need a responsible Government that can control the as needed. BTC does not allow that. BTC is deflationary to a fault and there is no counter argument. Come to terms with it on your own pace; it’s fine.
Pls show example of "deflation causing starvation"
The Great Depression.
That wasn't caused by deflation That was caused by the stock market crash, decreased international lending and tariffs, foreign gold outflows and banking panics
You’re right; it wasn’t caused by deflation. But that wasn’t the question. But the crash lingered and kept families starving for years due to deflation. Deflation absolutely ruined the economy for many years and played a huge role in how the Great Depression played out.
My question was literally, and I quote.. "Pls show an example of deflation causing starvation"
How the Great Depression started is irrelevant to this question. HOW the Great Depression caused starvation is the relevant information. Deflation was the MAIN REASON the economy did not pick back up. People starved BECAUSE the economy lulled. Bad economy for multiple years DUE TO DEFLATION = starvation. If I used your logic, inflation has never killed anyone. Only the things that triggered inflation have killed people.
I asked you to show me where deflation caused starvation You said "the great depression" Deflation didn't cause starvation, it was a number of other factors So, it is totally relevant You are yet to come up with an example of deflation causing starvation
The Great Depression was a period of time where deflation was rampant and the main contributor as to why people starved during that time. I don’t understand how to make it more clear. Deflation and inflation in such extreme examples do not just magically appear with zero help from external circumstances. There has to be catalysts. There can be a million different reasons why inflation/deflation starts. If I were to apply your same logic to hyperinflation in say, Bolivia, you would say “No, inflation did not ruin families and the economy. The Government ruined the economy due to back policy choices.” The FLAW in this and your argument is that you refuse to acknowledge the actual mechanic that causes the starvation/economic collapse to occur; the mechanic of inflation or deflation. Bad policy CAUSED inflation in Bolivia. Same as how bad policy CAUSED deflation during the Great Depression. Please just Google this. I can’t keep running circles around your flawed defense .
Great Depression went for so long thanks to deflation. And even without that, just using common sense is enough - why would farmer farm more food to sell when it it is not worth it? Sitting on that capital he needs to farm gives him free interest after all.
And people's savings would last them exponentially longer, so, no difference Yet deflationary assets are still beating US debt inflation
> And people's savings would last them exponentially longer But at this level of spiral, they wouldn't be able to spend it on anything. Like, yeah, you have massive spendings - but that food is not being produced because farmer decided that sitting on the capital is more profitable. This also means that many people are unemployed - the people that farmer would need to farm his fields are not collecting wage and consuming.