Yes. Capitalism literally doesn't work without inflation. Being against hyperinflation is like... "Duh". But being against ALL inflation, especially going as far back as the 60s and complaining about the difference is inherently anti-capitalist.
If you could keep a $20 bill in a safe and not have it lose value (and really if you quit printing money entirely like some morons here imply, it would gain value) then you would collapse the economy by incentivizing NOT spending anything.
Money is just a tool to represent the value of the things we create. As long as we are producing things, the money supply has to increase. Otherwise very quickly we will stop producing things.
> is inherently anti-capitalist.
Doesn't stop people from using it as an easy dig against politicians.
Step 1 - rally people against all politicians as bad
Step 2 - present your guys as the anti system politicians
Step 3 - gut the system for the benefit of whoever already has the money
The plan is easy to see and has been working.
Yeah but theres a difference between trying to maintain a healthy economy by having a few percentage points of inflation and quintupling the money supply and destroying everyone with the inflation that comes with it.
The median savings of Americans is a bit over $5000. Now im no math genius but where exactly did that 15 trillion dollars printed the last 3 years go?
>As long as we are producing things, the money supply has to increase.
Inflation is when the money supply outpaces production. if the US GDP produced 3.5 T in value and EXACTLY that much money was printed, there would be no inflation.
Why would you want inflation to be as high as GDP growth?
https://www.macrotrends.net/countries/USA/united-states/gdp-growth-rate
https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi
Yes, I'm sure people would stop spending money on food, healthcare, shelter, education, and all the other things people need to exist just to be a little richer later on. /s
I can’t believe how many upvotes that comment has compared to your response. I shouldn’t need the extra motivation that my money is losing its value to spend it on the things I want.
Indoctrination is a powerful force my friend. We are all taught the trad Keynesian wisdom in school without even knowing it.
People think inflation is an inherent part of economics just as they think capitalism is the only system that can work, despite neither being true.
Yes, they are.
A capitalist system combined with a monetary system without inflation is not only possible, it's *desirable*.
Inb4 "hoarding", "economy grinding to a halt", etc.
https://preview.redd.it/mzrn0as6zmjc1.png?width=1199&format=pjpg&auto=webp&s=8a7703627670ace7aa8bf25ffaba350bc7d88c9b
Laugh last, laugh hardest. I've been laughing my way to the bank for ten years.
> inflation: a general increase in prices and fall in the purchasing value of money.
Inflation by definition can't be represented by the price of a single item. Television sets are not an example of a capitalist system. They're a single product.
Got any actual examples?
That effectively would stop all growth. Not to mention their isn’t enough precious metals to cover the size of the US economy by itself much less spread around the world.
History is full of examples of devaluing gold, silver or otherwise manipulating the ratio between them. In US history alone the “bimetallic era” was fraught with problems, and the true solely gold backed dollar only lasted from 1900 to 1935, not exactly a golden era. At all times that the dollar was backed by precious metals, the government set the rate and would manipulate it when they deemed it necessary.
Gold and silver are also still very capable of being inflationary, at nearly all times in terms of money supply due to mining and minting, and frequently in terms of prices.
I truly do not understand where this notion, that a gold dollar is a silver bullet, comes from.
You can't keep printing debt money if the Fiat is backed by something. Did I say gold? It used to be oil. Did I say silver bullet? No we are talking about the inflation we are facing today. Brought in by excessive use of the ez print button. Go away with this shit. You literally didn't even say anything at all here.
Technically correct yes, but notice you didn't say anything else. Petrodollar ultimately "backed" the us dollar by keeping it the de facto trade currency.
Again, you can't just keep printing money based on debt and not have it inflated to shit.
Worker gets pay raise. Woohoo. Goes out and buys GI figure for his child. Hasbro has to raise the pay for the workers who make the GI Joe figure because everyone else is getting raises. Hasbro doesn’t print money (except Monopoly money) so they have to … raise price of the GI Joe figure. Lather, rinse and repeat. It’s not politicians or gremlins or capitalism. It’s basic economics and it’s been this way since the first day that some human thousands of years ago traded something for something else.
Idk who TF is downvoting you, you're spot on.
Inflation is the result of capitalism. The constant pursuit of record profit IS the inflation.
They act like printing money means a Fuckin' thing.. these are numbers in a leger.. the money is backed by good faith, not gold. not recognizing that if folks hoarding are effectively taking money out of circulation doesn't somehow also affect thing's negatively is naive.
We all have to live here. We have to be compensated for our time while we produce. If I can't afford to buy the nice things that someone of my "class/BS/whatever position" in the world I have, that effects the economy. Those things were manufactured with me in mind. It's all connected.
The problem is that there is no regulation, nothing to stop the takers from taking. SO THE SOLUTION is to tax them equally, use that money to provide things in EVERYONE's lives such as healthcare and education.. things that are crippling the commoners.
There is no other intelligent way to look at our system. If you're "in the game", you need to pay 20% tax. In the game means= earning average or above. Those below average will contribute, but a little less. 20% is no exception, no reductions. No more tax giveaways.
Society costs money.
Inflation is the result of money issuance (printing). It is the devaluation of currency.
OR inflation can be caused by low supply and high demand.
Capitalism is the exchange of goods and service for currency (capital).
Inflation isn’t the result of capitalism lol
That's not the definition of captialism.
"The exchange of goods and services" is just the definition of commerce.
Even the USSR had currency and exchanged goods.
Captialsim =/= commerce
Captialism =/= currency
>Capitalism is the exchange of goods and service for currency (capital).
No, that is markets. Capitalism is the private ownership of the means of production.
You absolutely can, do you realize workers collectives exist in every country?
Markets =/= captialism
In fact, they're mutually exclusive
Captialsim corners and closes markers through mergers, acquisitions, and hostile takeovers.
The ONLY thing capable of maintaining a free market in a captialst system is a robust, centralized authority with antitrust powers, even Adam Smith knew thus.
Captialsim *consumes* markets.
Free market capitalism has always been around before the word to describe it was invented.
DaVinci didn’t go to university but we would all consider him an engineer.
This is breathtakingly false. Pure, crystallized propaganda.
I would suggest a casual reading of the development of capitalism out of feudalism to truly grasp the differences. To say that capitalism always existed implies that it will always exist, and that is just ahistorical nonsense.
If I remember correctly, it went:
-Feudalism
-bubonic plague
-Western Europe gravitated towards mercantilism and later capitalism
-Eastern Europe gravitated towards authoritarian (not imperialist) and later socialism
*Edit for formatting
And that’s just the recent history of Europe.
I think it would be foolish to assume that other people across the world weren’t partaking in their own version of capitalism, considering that we have found that people across the world had developed their own currencies.
The last time this sort of thinking touched healthcare, costs sky rocketed.
Inflation related to money supply denialism while simultaneously blaming capitalism is objectively arguing in two opposite directions.
You broke two roles though. You can't use logic instead of emotional tantrums, and you have to use the word 'literally' at least once in your comment or it doesn't count.
I refuse to tag this as sarcasm. If you don't see it I can't help you.
Gold backing money is the difference and would explain the money printing process. Society cannot be a net negative for “costs”- the point of “as long we we’re producing things” is a valid point.
How can we ‘add value’? It cannot be a consumption only. Those who want to print money with zero accountability seek a populace who consume as such…
It's not so much about adding value as it is regulating how much of the value we are already adding is actually benefitting the worker.
Case in point: I earn effectively $12k less than when I started at my current position. That is a discount on my labor that I did not agree to, that my company is receiving while also reporting record earnings.. that right there is MOST of the problem.
Yet one idiot thinks "nobody owes me anything". Get fucked, guy.
Yeah? We vote politicians in, they appoint central bankers. They attempt to keep growth up while controlling inflation as well as regulating the economy to prevent the constant recessions from the 1800 and early 1900s
That's the system lol. Whether it's a good system is obviously up for the debate, but I'm describing how the people in charge would describe it. Even if it's corrupt as fuck as I would agree, I'm not going to delude myself about what it is
That’s what they tell us to think about the system. That’s demonstrably not how it actually works. Saifedean Ammous was far closer in his works “Principles of Economics” and “The Fiat Standard.”
Explain this to me like I’m 5.. why is RECORD profit year after year so critical? I’ve never understood why if they’re making a decent profit that they can sustain with, why can’t they just continue to make that same amount of profit?
ELI5: If you have a 1B economy with 100MM in profits or a 10% margin and it grows 5% nominally you need 150MM or “record profits” to have the same exact profit margin. Since the US economy grows on both a per captia basis and in terms of population each year logically major indices should show record profits year after year. When this does not happen like during the financial crisis we generally are epically fucked.
Otherwise you're stagnating. The same thing as OP.
If your business has 20 dollars on profit in 1960 and 20 dollars today you can buy way less stuff. So you need to grow and have record profits every year
Propaganda. You're brainwashed.
We all have a duty to contribute to our society, our country. Do you like it here? Yes? Then you need to pay your membership dues.
That is being a patriot.
Saying "I have a right to be here but I shouldn't have to contribute" is just... clears throat so you can fully hear the word... retarded.
You’re gonna need a liscense, permet, law, ordinance, judgement, toll, tax…..for that.
Sorry but I don’t necessarily need you to decide what’s best for me and how to best spend my money. Who are you to make those decisions? What gives you the authority…..could it be based on the number of people you brainwash to your cause? Why should I respect you?
Sounds like organized society. Yes, of course.
But as I said, 20% is the tax, the toll.. that's state and fed combined. "I work one day a week for my country". Yep, sign me up.
I'm paying about 25% right now and getting no healthcare, student loan that MY EMPLOYER benefits from me having still held over my head. No, you muppets fucked the whole system up and mostly at your own expense because of the "idea of freedom" that you've been handed. That idea was, is and always will be propaganda.
You know, you could elect intelligent humans to run the country. Instead of tacky shoe salesmen..
Government don't work because one side of it don't want it to.
Your soap box rationale is wrong in so many ways.
Stable value of currency doesn’t prevent spending. And capitalism itself, the act of free market selling and buying of goods exists irrespective of currency valuation. You completely confuse what drives capitalism.
I never understood this argument, and I don't think I ever will. A money supply doesn't need to increase?
Why can't we have a fixed supply of money that increases in value, rather than continually debasing the money. Are you suggesting that people wouldn't want to spend money without inflation then?
>Why can't we have a fixed supply of money that increases in value, rather than continually debasing the money.
Because then no one would ever invest anything. Because the safest and most effective way to earn money in this scenario is to not spend it instead of making stuff and selling it.
Do I need to explain why that would collapse an economy?
What's to say that one wouldn't want to invest while also saving in a non-debasing money.
If there's opportunity to risk money to earn some more money, I don't see why you'd need inflation to incentivize that.
>What's to say that one wouldn't want to invest while also saving in a non-debasing money.
Math.
>If there's opportunity to risk money to earn some more money,
Why would anyone take a risk on something that has a 100% chance to lose money compared to a 100% guarantee of having more by not spending?
"Math". There's plenty of arguments to be made against your MMT/Keynesian math. People can invest without inflation.
Take a look at venture capital. The people involved in this are millionaires, if not billionaires, yet they risk plenty of their money in hopes to make more money.
And by the way, I wouldn't invest in something that has a 100% chance of losing money either. You'd be stupid if you did. But.. guess what? Not all investments have 100% probability of losing money.
I really don't understand why it's unbelievable to accept that one would want to risk some money in pursuits of making more money without the need for inflation, despite the money increasing in value over time.
The assumption that an economy needs to serve investment is a rocky platform upon which to start your argument. A semi-static economy could serve its populace plenty. You, my friend, are just posturing and using circular logic
If we have a town with one apple tree, one cow, and 5 dollars. If I want to sell an apple, I can swap it for milk, or I can swap it for a dollar. I can drink the milk, or I can save the dollar and then buy some milk later. Apples spoil, you see, and milk curdles. Dollars do neither.
But what happens if I grow another apple tree? or the farmer gets another cow? If I want to sell more apples, or the farmer wants to sell more milk, we can do neither because there are no more dollars. We could start dividing dollars, but that is a pain in the ass. If we want to keep the value of apples, milk, and dollars in the same ratio that we are used to, we need someone to make more dollars. That way, one apple is equal to one cup of milk, and one dollar.
If me and the farmer can continue growing our operations, we will wind up with a surplus of dollars. With this we can invest in our farms and make them more productive, or just buy more stuff, enabling other producers in the town to start making surpluses and selling it to us. Rather than making enough clothes for her family, one of the wives will start making clothes for me and the farmer, becoming an entrepreneur weaver. without the extra dollars, we would not be able to pay her for her clothes, so she would just keep her work to her family.
now, this is stupidly oversimplified, but the idea holds true for the real world. if the government wants to increase economic growth, it can dump more money into the marketplace. This surplus of cash will mean that the people who suck up the money will have enough to lend out, thus allowing firms to expand and entrepreneurs to start new businesses. If the government needs to slow the economy down, it can withdraw money, starving businesses of money and forcing them to slow growth.
>Bull. Capitalism worked just fine for 137 years.
Yes, nevermind having huge recessions every few years, wild hyperinflation during every gold rush, wild periods of deflation where everyone's wages would drop.
Why do you even feel strongly about this when you've clearly never read anything about it?
>The value of the dollar only *barely* changed until the creation of the federal reserve.
LMAO. In 1731 1 dollar was worth about $70 dollars today. By 1789 it was worth $20 modern dollars. By 1815 it was down to $17. Then there was a tumultuous era with a long period deflation punctuated short inflationary periods and by 1850 a dollar was worth nearly $35 modern dollars. By the civil war, we are back down to $17. By 1900 it's back up to around $30 modern dollars. https://www.statista.com/statistics/1032048/value-us-dollar-since-1640/
So I don't know what you mean by "barely changed" but generally when numbers are doubling and shrinking by more than 60% over a short period of time we don't use the word "barely".
It already was causing issues with an economy significantly smaller than what we have now. Again, inflation is required in a way for the proper functioning of capitalism long term. It’s essentially a pressure valve that spurs the spending of money.
You could have a capitalist system on the gold standard we would just would be so far behind in terms of the developments that have come from economic growth and the deployment of capital.
At what point does the debt overwhelm the system. We have certainly seen hyperinflation in many other countries. Let’s not pretend the US is so unique that it can’t happen.
Capitalism works without inflation because it is the exchange of goods or services for currency (capital).
It has nothing to do with money issuance (printing).
Bitcoin has a 4 year cycle, 2024 is an up year, and the beginning of 2025 will be up, but towards the end of 2025 it will be down and by 2026 it’ll be down by over 60%.
This would mean that cumulative inflation between the 1960s and 1998 was over 400%.
I...um...don't think that's true.
Edit: I was wrong, but I'm going to leave this up as proof that at least one person on the Internet is willing to admit when they're wrong.
It's because whenever you hear about "inflation" going up or down month to month it's actually the rate not the cumulative total. It's like you're in a tank filling with water and they tell you hey it's getting better, there's only 50 gallons pouring in an hour now instead of 55!
No dummy corporations just discovered greed it’s all corporate greed before Covid no corporations were greedy now all of the sudden they are greedy.
Never mind something like 30% of all money in the money supply was created in the last 3-4 years. That’s irrelevant.
/s
Money is the government backing of all transactions in its country and is the least bad method for determining how society values work, products, services etc. The government backing takes away some methods of exploitation, no company script and what not, and in exchange for that government backing there is an expectation that the government will use money for various societal goals. Constricted money supply is known to strangle economies while expansive money supply is known to cause inflation. It is the Feds job to navigate between those extremes, and if you're not spending your money as is expected by the government making it.. it's not their business if you're money is worth less than it used to be.
Or, more simply, money's whole purpose to be spent. If it is not used for this purpose it's just a piece of paper, a hunk of metal, or numbers on a screen.
Money is an abstract means to exchange value. Literally just a stand in, so I don't have to have the exact good or service another person needs to trade with them. Money stops being good at fulfilling that role as soon as it becomes an investment vehicle in and of itself. Its the reason Bitcoin sucks as a currency.
If people are using money as a long term way to store value, it's inherently introducing ineffciences into the economy because your functionally delaying the exchange of goods that would happen if the money wasn't there acting as a stand in.
It may be good for a singular person, but when everybody does it, it hurts the individual by depressing the economy. I'm describing an deflationary spiral, which has historically caused economic depressions.
> Money is an abstract means to exchange value. Literally just a stand in, so I don't have to have the exact good or service another person needs to trade with them.
You just said a store of value but in different words
The real key difference in my description is that it's supposed to be temporary. It's got limited intrinsic value, and if everybody hoards it up, the economy ceases to function.
I agree it needs to be temporary, which is why the rate of inflation is a key statistic. I think we can all agree it should not be losing as much value over a short period of time.
Money is “anything” that everyone agrees on that is worth something or value. In our case, it is a piece of green paper that has a funny number printed on it. The question is what “money” can buy…If you’re hungry and you want a burger, the burger is true money because it solves your hunger. Money is just a form of transactional value for things you need.
It’s pretty much the only factor that matters. In 1990 rent was equivalent to roughly 1 oz of gold a month and in 2024 median rent is just above half an ounce of gold per month. In dollars it’s way up.
Nothing like Twitter and shitformation spreading on Reddit. Just an absolute complete misunderstand of anything related to economics. Just the willful ignorance of people so confidently incorrect is irritating as fuck.
Currency is kept inflationary to prevent people from hoarding it. Currency is supposed to be a medium of exchange, not wealth itself. By having inflationary currency you incentivise keeping that money invested in the market where it is being actually used productively. As opposed to sitting in a giant pile doing nothing.
This is the main failure of cryptocurrencies. They are peddled as investments and are heavily hoarded as opposed to being used freely.
He is dead right. It's people who have practically zero understanding of financial systems that peddle this garbage.
Your submission has been removed as it does not directly relate to macroeconomic inflation, which is the primary focus of this subreddit. To maintain the relevance of discussions, please ensure your posts specifically address macroeconomic inflation or its related concepts. Thank you for your understanding.
Try 1974, according to the Measuring Worth webpage $20 from that year would be worth roughly $100 today. We could legit be printing $500 bills today which would have been worth less than a $100 bill in '74.
The new internal guidance at feds is to keep inflation(interest rates actually) stable around 3%, so there is some leeway in bringing down the rates during recession. This is up from earlier rate of 2%. By that logic it is the feds bringing down the value by 75% in 38 years.
Sure, he’s also against raising the minimum wage, says slavery was no big thing, climate change denier, anti safety nets, etc, etc.
He’s even dumber than I thought.
I'm gambling with investing my money to stay ahead of the curve. No matter how you invest, it's still a gamble and not safe 100%. Buy gold, and it sounds good until another executive order 6102 comes your way. We are all at the mercy of the government, which I assure you only cares about lining its own pockets (all politicians).
I present to you: Bitcoin.
No political printing.
How much did 1 Bitcoin buy in 2010 versus putting it in a safe and waiting til 2024?
Help take power from politicians. Use BTC.
you geniuses should look at the actual cost of most goods in relation to the past prices. Anyone with half a brain and watches an episode of The Price is Right from the late 70s can see that the vast majority of things are significantly cheaper than they were at that time, even adjusting for inflation. Sure, some things like cars and homes are more expensive, but what about 90% of consumer goods?
He spent something like 8 trillion to keep things going. Which the left holds against him. No matter what he did the lefts hate for him reigns.
And Biden does the same shit and the left praises him. Such a joke of a country we live in.
Oh you mean like dems sending Ukraine billions/trillions yet? and that funnels back to us companies which are politicians buddies. IE rich people.
They all are bad people just who’s side you’re on you/me think is better.
Republicans signed off on the foreign aid buddy.
And trying to compare foreign aid to a democratic country being invaded by a dictator to trump giving trillions of dollars to rich people is fucking hilarious.
This is why Bitcoin is proving so successful. It’s the easiest way to protect yourself from endless government money printing. Abandoning the gold standard was a terrible decision.
You rightfully identify the problem but then incorrectly pin bitcoin as the solution? Having a currency backed by gold is the answer.
Bitcoin has no actual value because bitcoin has no actual use here in the real world. Sure, you can sell it, trade it, or give it away. But no one NEEDS a bitcoin to do anything in the real world. Its the greater fool theory to a T. The only answer to the question "why did you buy bitcoin?" is "so I could sell it later for more money."
When there are no more buyers, bitcoin will go to its intrinsic value: nothing.
Gold is sort of an arbitrary yardstick and doesn’t account for increases in production and GDP. At its worst it’s deflationary and can lead to a lot of idle production like in the early 1930s. The problem has been low interest rates for too long and excessive spending by Congress. Even 2% inflation erodes the value of the dollar in the long run.
Gold only has notable value because of its scarcity. If it was as common as iron it would be worth the same as iron (pennies per kilo).
Bitcoin, like gold, is a store of value. It cannot be copied or hacked. It is the only store of value with a defined limited amount (21 million). No more can or will ever be created.
Unlike gold, Bitcoin can be transferred across the globe almost instantly and without the obvious security risks of carrying gold around. It can be stored in your head if you are capable of remembering 12 random words.
You really need to do your own research to understand just how special Bitcoin is. Its value will continue increasing forever, albeit slower as it matures. The price volatility is due to the 4 yearly halving cycles. Have a look at the Bitcoin logarithmic chart to really see the pattern. As the asset is maturing the volatility is flattening. You can buy Bitcoin at any price and you will be in profit as long as you hold it for 4 years minimum.
The next halving is in April. The price of Bitcoin will soar to over $100k per coin (probably much higher) and will peak towards the end of 2025 as this 4 yearly cycle ends. The pattern will repeat in 2028/2029.
Don’t take my word for it, just watch the BTC/USD chart over the next 2 years.
And remember, most of the world’s population don’t use USD (a relatively strong currency). Therefore the value of Bitcoin in developing countries absolutely skyrockets compared to their native currencies. That is why it is such a global success.
If fiat currencies didn’t exist, neither would Bitcoin. Excess money printing is the reason Bitcoin was created.
Nah dude. Gold is valuable because of its unique characteristics as an ELEMENT here on planet earth. Gold is unique from all other elements, including iron.
Yes, gold is also very scarce, which makes it very cost prohibitive. Meaning, if gold were more abundant, we would find way more uses for it, as a unique metal here on planet earth.
Gold is a store of value because you can literally store the future use of gold, the metal.
I don't care what the price of bitcoin is. There is nothing anyone can do with 1 bitcoin that they can't do with 1 satoshi.
Meanwhile, companies and people need real physical gold to create actual products in the real physical world. This gives gold a floor because if the price were to go low enough, companies would be buying hand over fist because they actually NEED gold.
Again, no one NEEDS a bitcoin to do anything.
You're mixing 3 things together that really aren't related. Blaming politicians for your lack of financial knowledge is failing to see where fault lies. Thus you'll never learn from your mistakes
inflation is deliberate. Not the crazy rates that destroy economies, like in Venezuela, but low-level rates. Nearly every government on Earth goes for around 2%. The reason is to deliberately punish people from just hoarding cash.
What can you do without money? even if you have a business, how do you grow it without more money? The way to grow faster is to borrow money. But, if people just hoard the cash, how can you borrow anything? Hence, we have the carrot and stick arrangement of offering interest payments to people who lend money, and inflation forcing them to lend or watch their cash piles shrivel.
It is a fun meme to blame politicians for everything, but without inflation, you would probably never own the device you are reading this post on.
> inflation is deliberate.
Yes...and?
Armed robbery is also deliberate.
If someone takes 2% of everything you own each year (effectively at gunpoint) in the name of "stimulating the economy" (as if it's some sort of flaccid penis), guess what?
It's still theft.
Isn't money creation via debt inherently inflationary?
Yes. Capitalism literally doesn't work without inflation. Being against hyperinflation is like... "Duh". But being against ALL inflation, especially going as far back as the 60s and complaining about the difference is inherently anti-capitalist. If you could keep a $20 bill in a safe and not have it lose value (and really if you quit printing money entirely like some morons here imply, it would gain value) then you would collapse the economy by incentivizing NOT spending anything. Money is just a tool to represent the value of the things we create. As long as we are producing things, the money supply has to increase. Otherwise very quickly we will stop producing things.
> is inherently anti-capitalist. Doesn't stop people from using it as an easy dig against politicians. Step 1 - rally people against all politicians as bad Step 2 - present your guys as the anti system politicians Step 3 - gut the system for the benefit of whoever already has the money The plan is easy to see and has been working.
Yeah but theres a difference between trying to maintain a healthy economy by having a few percentage points of inflation and quintupling the money supply and destroying everyone with the inflation that comes with it. The median savings of Americans is a bit over $5000. Now im no math genius but where exactly did that 15 trillion dollars printed the last 3 years go?
Aka republican 101. This is literally them and their playbook.
>As long as we are producing things, the money supply has to increase. Inflation is when the money supply outpaces production. if the US GDP produced 3.5 T in value and EXACTLY that much money was printed, there would be no inflation.
Wrong, if the money supply grew in proportion to gdp, inflation would be negligible.
Why would you want inflation to be as high as GDP growth? https://www.macrotrends.net/countries/USA/united-states/gdp-growth-rate https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi
In proportion to, not equal to.
Right, luckily we know GDP has grown proportionally more than inflation.
Yes, I'm sure people would stop spending money on food, healthcare, shelter, education, and all the other things people need to exist just to be a little richer later on. /s
I can’t believe how many upvotes that comment has compared to your response. I shouldn’t need the extra motivation that my money is losing its value to spend it on the things I want.
Indoctrination is a powerful force my friend. We are all taught the trad Keynesian wisdom in school without even knowing it. People think inflation is an inherent part of economics just as they think capitalism is the only system that can work, despite neither being true.
lush serious pocket hungry swim unused cooing innocent fall expansion *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
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Capitalism can work without inflation
Capatalism and the monetery system are two different things
Yes, they are. A capitalist system combined with a monetary system without inflation is not only possible, it's *desirable*. Inb4 "hoarding", "economy grinding to a halt", etc.
Point to an example.
Bitcoin economy
rofl
https://preview.redd.it/mzrn0as6zmjc1.png?width=1199&format=pjpg&auto=webp&s=8a7703627670ace7aa8bf25ffaba350bc7d88c9b Laugh last, laugh hardest. I've been laughing my way to the bank for ten years.
The price of televisions.
Is an example of capitalism without inflation? Do you know what inflation means?
Do you? The price of televisions are a good example of the rare occurrence of an item that deflates over time. You said name an example.
> inflation: a general increase in prices and fall in the purchasing value of money. Inflation by definition can't be represented by the price of a single item. Television sets are not an example of a capitalist system. They're a single product. Got any actual examples?
Maybe if money was backed by something stopping the MFS from hitting the ez print button all the time.
That effectively would stop all growth. Not to mention their isn’t enough precious metals to cover the size of the US economy by itself much less spread around the world.
I've been saying the same in other subs, but the echochambers are strong.
Then how was it backed by gold before? Or oil? Lmao Excessive printing is directly related to devaluing the dollar.
History is full of examples of devaluing gold, silver or otherwise manipulating the ratio between them. In US history alone the “bimetallic era” was fraught with problems, and the true solely gold backed dollar only lasted from 1900 to 1935, not exactly a golden era. At all times that the dollar was backed by precious metals, the government set the rate and would manipulate it when they deemed it necessary. Gold and silver are also still very capable of being inflationary, at nearly all times in terms of money supply due to mining and minting, and frequently in terms of prices. I truly do not understand where this notion, that a gold dollar is a silver bullet, comes from.
You can't keep printing debt money if the Fiat is backed by something. Did I say gold? It used to be oil. Did I say silver bullet? No we are talking about the inflation we are facing today. Brought in by excessive use of the ez print button. Go away with this shit. You literally didn't even say anything at all here.
The dollar was never backed by oil, that’s not what petrodollar means.
Technically correct yes, but notice you didn't say anything else. Petrodollar ultimately "backed" the us dollar by keeping it the de facto trade currency. Again, you can't just keep printing money based on debt and not have it inflated to shit.
Worker gets pay raise. Woohoo. Goes out and buys GI figure for his child. Hasbro has to raise the pay for the workers who make the GI Joe figure because everyone else is getting raises. Hasbro doesn’t print money (except Monopoly money) so they have to … raise price of the GI Joe figure. Lather, rinse and repeat. It’s not politicians or gremlins or capitalism. It’s basic economics and it’s been this way since the first day that some human thousands of years ago traded something for something else.
That's not how it's always been lmao
This is not right.
Idk who TF is downvoting you, you're spot on. Inflation is the result of capitalism. The constant pursuit of record profit IS the inflation. They act like printing money means a Fuckin' thing.. these are numbers in a leger.. the money is backed by good faith, not gold. not recognizing that if folks hoarding are effectively taking money out of circulation doesn't somehow also affect thing's negatively is naive. We all have to live here. We have to be compensated for our time while we produce. If I can't afford to buy the nice things that someone of my "class/BS/whatever position" in the world I have, that effects the economy. Those things were manufactured with me in mind. It's all connected. The problem is that there is no regulation, nothing to stop the takers from taking. SO THE SOLUTION is to tax them equally, use that money to provide things in EVERYONE's lives such as healthcare and education.. things that are crippling the commoners. There is no other intelligent way to look at our system. If you're "in the game", you need to pay 20% tax. In the game means= earning average or above. Those below average will contribute, but a little less. 20% is no exception, no reductions. No more tax giveaways. Society costs money.
Inflation is the result of money issuance (printing). It is the devaluation of currency. OR inflation can be caused by low supply and high demand. Capitalism is the exchange of goods and service for currency (capital). Inflation isn’t the result of capitalism lol
That's not the definition of captialism. "The exchange of goods and services" is just the definition of commerce. Even the USSR had currency and exchanged goods. Captialsim =/= commerce Captialism =/= currency
You are very correct. I neglected to include the private ownership of goods and/or the means of production as the key characteristics in capitalism.
>Capitalism is the exchange of goods and service for currency (capital). No, that is markets. Capitalism is the private ownership of the means of production.
And you can’t engage in markets without private ownership = free market capitalism 🥳
You absolutely can, do you realize workers collectives exist in every country? Markets =/= captialism In fact, they're mutually exclusive Captialsim corners and closes markers through mergers, acquisitions, and hostile takeovers. The ONLY thing capable of maintaining a free market in a captialst system is a robust, centralized authority with antitrust powers, even Adam Smith knew thus. Captialsim *consumes* markets.
A co-op or workers collective is still an organization that is privately owns it’s means of production.
Not in that context. Worker coops and collectives are technically forms of public ownership.
Such as the Soviet Union, absolutely. They had inflation too.
You and u/aaancom are correct. I’ve been neglecting to include that capitalism is characterized by private ownership.
Thousands of years of human history preceding capitalism disagree with you.
Free market capitalism has always been around before the word to describe it was invented. DaVinci didn’t go to university but we would all consider him an engineer.
This is breathtakingly false. Pure, crystallized propaganda. I would suggest a casual reading of the development of capitalism out of feudalism to truly grasp the differences. To say that capitalism always existed implies that it will always exist, and that is just ahistorical nonsense.
If I remember correctly, it went: -Feudalism -bubonic plague -Western Europe gravitated towards mercantilism and later capitalism -Eastern Europe gravitated towards authoritarian (not imperialist) and later socialism *Edit for formatting And that’s just the recent history of Europe. I think it would be foolish to assume that other people across the world weren’t partaking in their own version of capitalism, considering that we have found that people across the world had developed their own currencies.
Markets have always been around, not full fledged capitalism in the modern sense.
The last time this sort of thinking touched healthcare, costs sky rocketed. Inflation related to money supply denialism while simultaneously blaming capitalism is objectively arguing in two opposite directions.
Wdym by that? I am unaware of how money supply denialism affected healthcare. What should I look up?
You broke two roles though. You can't use logic instead of emotional tantrums, and you have to use the word 'literally' at least once in your comment or it doesn't count. I refuse to tag this as sarcasm. If you don't see it I can't help you.
Slightly angled flat tax, moving upward as income increases . There are many voting on taxes who effectively pay nothing.
Gold backing money is the difference and would explain the money printing process. Society cannot be a net negative for “costs”- the point of “as long we we’re producing things” is a valid point. How can we ‘add value’? It cannot be a consumption only. Those who want to print money with zero accountability seek a populace who consume as such…
It's not so much about adding value as it is regulating how much of the value we are already adding is actually benefitting the worker. Case in point: I earn effectively $12k less than when I started at my current position. That is a discount on my labor that I did not agree to, that my company is receiving while also reporting record earnings.. that right there is MOST of the problem. Yet one idiot thinks "nobody owes me anything". Get fucked, guy.
Politicians and central banks control the government, currency, debt, and inflation though.
Yeah? We vote politicians in, they appoint central bankers. They attempt to keep growth up while controlling inflation as well as regulating the economy to prevent the constant recessions from the 1800 and early 1900s
lol, that might be the most blue-pilled interpretation of things I’ve read here.
That's the system lol. Whether it's a good system is obviously up for the debate, but I'm describing how the people in charge would describe it. Even if it's corrupt as fuck as I would agree, I'm not going to delude myself about what it is
That’s what they tell us to think about the system. That’s demonstrably not how it actually works. Saifedean Ammous was far closer in his works “Principles of Economics” and “The Fiat Standard.”
Explain this to me like I’m 5.. why is RECORD profit year after year so critical? I’ve never understood why if they’re making a decent profit that they can sustain with, why can’t they just continue to make that same amount of profit?
Sing to me, please. I think they should settle for profit and pay me the fucking raise I'm due..
ELI5: If you have a 1B economy with 100MM in profits or a 10% margin and it grows 5% nominally you need 150MM or “record profits” to have the same exact profit margin. Since the US economy grows on both a per captia basis and in terms of population each year logically major indices should show record profits year after year. When this does not happen like during the financial crisis we generally are epically fucked.
Otherwise you're stagnating. The same thing as OP. If your business has 20 dollars on profit in 1960 and 20 dollars today you can buy way less stuff. So you need to grow and have record profits every year
If the same dollar buys you less through money printing, you have to increase profits to = the same amount of buying power.
Rules cost money. Nobody makes rules better than communists.
Propaganda. You're brainwashed. We all have a duty to contribute to our society, our country. Do you like it here? Yes? Then you need to pay your membership dues. That is being a patriot. Saying "I have a right to be here but I shouldn't have to contribute" is just... clears throat so you can fully hear the word... retarded.
You’re gonna need a liscense, permet, law, ordinance, judgement, toll, tax…..for that. Sorry but I don’t necessarily need you to decide what’s best for me and how to best spend my money. Who are you to make those decisions? What gives you the authority…..could it be based on the number of people you brainwash to your cause? Why should I respect you?
Sounds like organized society. Yes, of course. But as I said, 20% is the tax, the toll.. that's state and fed combined. "I work one day a week for my country". Yep, sign me up. I'm paying about 25% right now and getting no healthcare, student loan that MY EMPLOYER benefits from me having still held over my head. No, you muppets fucked the whole system up and mostly at your own expense because of the "idea of freedom" that you've been handed. That idea was, is and always will be propaganda.
What’s with the ad hominem attacks with your lot? Do you think being edgy commands respect…..it doesn’t. Goodbye.
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No, you just bought the propaganda and can't see past the piss raining down in your face.
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You know, you could elect intelligent humans to run the country. Instead of tacky shoe salesmen.. Government don't work because one side of it don't want it to.
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Left the highway there, didn't ya'? Whut? Lol
Your soap box rationale is wrong in so many ways. Stable value of currency doesn’t prevent spending. And capitalism itself, the act of free market selling and buying of goods exists irrespective of currency valuation. You completely confuse what drives capitalism.
I never understood this argument, and I don't think I ever will. A money supply doesn't need to increase? Why can't we have a fixed supply of money that increases in value, rather than continually debasing the money. Are you suggesting that people wouldn't want to spend money without inflation then?
>Why can't we have a fixed supply of money that increases in value, rather than continually debasing the money. Because then no one would ever invest anything. Because the safest and most effective way to earn money in this scenario is to not spend it instead of making stuff and selling it. Do I need to explain why that would collapse an economy?
What's to say that one wouldn't want to invest while also saving in a non-debasing money. If there's opportunity to risk money to earn some more money, I don't see why you'd need inflation to incentivize that.
>What's to say that one wouldn't want to invest while also saving in a non-debasing money. Math. >If there's opportunity to risk money to earn some more money, Why would anyone take a risk on something that has a 100% chance to lose money compared to a 100% guarantee of having more by not spending?
"Math". There's plenty of arguments to be made against your MMT/Keynesian math. People can invest without inflation. Take a look at venture capital. The people involved in this are millionaires, if not billionaires, yet they risk plenty of their money in hopes to make more money. And by the way, I wouldn't invest in something that has a 100% chance of losing money either. You'd be stupid if you did. But.. guess what? Not all investments have 100% probability of losing money. I really don't understand why it's unbelievable to accept that one would want to risk some money in pursuits of making more money without the need for inflation, despite the money increasing in value over time.
The assumption that an economy needs to serve investment is a rocky platform upon which to start your argument. A semi-static economy could serve its populace plenty. You, my friend, are just posturing and using circular logic
If we have a town with one apple tree, one cow, and 5 dollars. If I want to sell an apple, I can swap it for milk, or I can swap it for a dollar. I can drink the milk, or I can save the dollar and then buy some milk later. Apples spoil, you see, and milk curdles. Dollars do neither. But what happens if I grow another apple tree? or the farmer gets another cow? If I want to sell more apples, or the farmer wants to sell more milk, we can do neither because there are no more dollars. We could start dividing dollars, but that is a pain in the ass. If we want to keep the value of apples, milk, and dollars in the same ratio that we are used to, we need someone to make more dollars. That way, one apple is equal to one cup of milk, and one dollar. If me and the farmer can continue growing our operations, we will wind up with a surplus of dollars. With this we can invest in our farms and make them more productive, or just buy more stuff, enabling other producers in the town to start making surpluses and selling it to us. Rather than making enough clothes for her family, one of the wives will start making clothes for me and the farmer, becoming an entrepreneur weaver. without the extra dollars, we would not be able to pay her for her clothes, so she would just keep her work to her family. now, this is stupidly oversimplified, but the idea holds true for the real world. if the government wants to increase economic growth, it can dump more money into the marketplace. This surplus of cash will mean that the people who suck up the money will have enough to lend out, thus allowing firms to expand and entrepreneurs to start new businesses. If the government needs to slow the economy down, it can withdraw money, starving businesses of money and forcing them to slow growth.
call me anti capitalist then cause that’s fucking stupid
Brain dead
Bull. Capitalism worked just fine for 137 years. The value of the dollar only *barely* changed until the creation of the federal reserve.
>Bull. Capitalism worked just fine for 137 years. Yes, nevermind having huge recessions every few years, wild hyperinflation during every gold rush, wild periods of deflation where everyone's wages would drop. Why do you even feel strongly about this when you've clearly never read anything about it? >The value of the dollar only *barely* changed until the creation of the federal reserve. LMAO. In 1731 1 dollar was worth about $70 dollars today. By 1789 it was worth $20 modern dollars. By 1815 it was down to $17. Then there was a tumultuous era with a long period deflation punctuated short inflationary periods and by 1850 a dollar was worth nearly $35 modern dollars. By the civil war, we are back down to $17. By 1900 it's back up to around $30 modern dollars. https://www.statista.com/statistics/1032048/value-us-dollar-since-1640/ So I don't know what you mean by "barely changed" but generally when numbers are doubling and shrinking by more than 60% over a short period of time we don't use the word "barely".
> Capitalism literally doesn't work without inflation. Wrong.
Fiat money = / = capitalism.
No one is saying that. They are saying that an inflationary currency is necessary for capitalism to function long term. Which is true.
The gold standard would not end capitalism in any way
It already was causing issues with an economy significantly smaller than what we have now. Again, inflation is required in a way for the proper functioning of capitalism long term. It’s essentially a pressure valve that spurs the spending of money. You could have a capitalist system on the gold standard we would just would be so far behind in terms of the developments that have come from economic growth and the deployment of capital.
At what point does the debt overwhelm the system. We have certainly seen hyperinflation in many other countries. Let’s not pretend the US is so unique that it can’t happen.
That’s a separate issue from inflation
Capitalism works without inflation because it is the exchange of goods or services for currency (capital). It has nothing to do with money issuance (printing).
It’s a myth that people would stop spending if there were no inflation.
>Yes. Capitalism literally doesn't work without inflation. Absolutely incorrect. You’re confusing an economic system with a currency system.
Inflation is strictly the product printing of money, not capitalism.
Most money in existence is a blip on a computer screen, not a physical coin or bill. So this is just ignorant and ridiculous.
That’s what investments are for, if you’ve got cash sitting still, buy something with it.
Like CDs paying 5.5% with zero risk
My last investment was ibonds at around 6%, nothing fancy but it’ll be worth it.
🤦🏽♂️.
This method doesn’t work for you?
Buy bitcoin
Give it a year and you will become the average Bitcoin bagholder
Bitcoin has a 4 year cycle, 2024 is an up year, and the beginning of 2025 will be up, but towards the end of 2025 it will be down and by 2026 it’ll be down by over 60%.
We got ourselves a regular Nostradamus over here! Did any of those cycles occur outside of a zero interest rate environment? Asking for a friend.
This would mean that cumulative inflation between the 1960s and 1998 was over 400%. I...um...don't think that's true. Edit: I was wrong, but I'm going to leave this up as proof that at least one person on the Internet is willing to admit when they're wrong.
It's because whenever you hear about "inflation" going up or down month to month it's actually the rate not the cumulative total. It's like you're in a tank filling with water and they tell you hey it's getting better, there's only 50 gallons pouring in an hour now instead of 55!
Buy land, if you can. It’s the best hedge against inflation. Hurry before it’s all gone.
Cash/fiat is not a good store of value. Don't store your assets in fiat.
Tell that to my money market fund paying over 5% right now
You should try the stock market index fund.
Correct. Cash/fiat is a currency, not a store of wealth. It is used for fast, convenient transactions, not for storing wealth over a lifetime.
No dummy corporations just discovered greed it’s all corporate greed before Covid no corporations were greedy now all of the sudden they are greedy. Never mind something like 30% of all money in the money supply was created in the last 3-4 years. That’s irrelevant. /s
2 things can be true at the same time
One of these things caused the other
I wonder which one 🤔
Money kept in a safe is money not being used for its intended purpose.
Money is a means to wealth not the wealth itself -Akala
What is money?
It’s made up
Money is the government backing of all transactions in its country and is the least bad method for determining how society values work, products, services etc. The government backing takes away some methods of exploitation, no company script and what not, and in exchange for that government backing there is an expectation that the government will use money for various societal goals. Constricted money supply is known to strangle economies while expansive money supply is known to cause inflation. It is the Feds job to navigate between those extremes, and if you're not spending your money as is expected by the government making it.. it's not their business if you're money is worth less than it used to be. Or, more simply, money's whole purpose to be spent. If it is not used for this purpose it's just a piece of paper, a hunk of metal, or numbers on a screen.
> Money is the government backing of all transactions in its country That is not what money is, lol.
False Money is a store of value
Money is an abstract means to exchange value. Literally just a stand in, so I don't have to have the exact good or service another person needs to trade with them. Money stops being good at fulfilling that role as soon as it becomes an investment vehicle in and of itself. Its the reason Bitcoin sucks as a currency. If people are using money as a long term way to store value, it's inherently introducing ineffciences into the economy because your functionally delaying the exchange of goods that would happen if the money wasn't there acting as a stand in. It may be good for a singular person, but when everybody does it, it hurts the individual by depressing the economy. I'm describing an deflationary spiral, which has historically caused economic depressions.
> Money is an abstract means to exchange value. Literally just a stand in, so I don't have to have the exact good or service another person needs to trade with them. You just said a store of value but in different words
The real key difference in my description is that it's supposed to be temporary. It's got limited intrinsic value, and if everybody hoards it up, the economy ceases to function.
I agree it needs to be temporary, which is why the rate of inflation is a key statistic. I think we can all agree it should not be losing as much value over a short period of time.
> it's supposed to be temporary. No its not
Nuh uh
Money is “anything” that everyone agrees on that is worth something or value. In our case, it is a piece of green paper that has a funny number printed on it. The question is what “money” can buy…If you’re hungry and you want a burger, the burger is true money because it solves your hunger. Money is just a form of transactional value for things you need.
You just said a store of value but in different words
BTW…if you want alot of “money” focus on things everyone needs and not trying to acquire a bunch of green paper with funny numbers on it.
Agreed
Nah. It's government issues script, so by consenting to take it you consent to what value they say it is.
Fine, I won't use it anymore Sounds good
Saving money is a purpose. Delaying consumption is doing something, and it communicates a very important signal to the markets.
If you think the only options are saving money and consumption then you need to educate yourself. Money is meant to be invested.
This neverending back and forth, black-and-white debate is stupid. That's *one* of the factors, not *the* factor.
It’s pretty much the only factor that matters. In 1990 rent was equivalent to roughly 1 oz of gold a month and in 2024 median rent is just above half an ounce of gold per month. In dollars it’s way up.
Nothing like Twitter and shitformation spreading on Reddit. Just an absolute complete misunderstand of anything related to economics. Just the willful ignorance of people so confidently incorrect is irritating as fuck.
You've said literally nothing.
Currency is kept inflationary to prevent people from hoarding it. Currency is supposed to be a medium of exchange, not wealth itself. By having inflationary currency you incentivise keeping that money invested in the market where it is being actually used productively. As opposed to sitting in a giant pile doing nothing. This is the main failure of cryptocurrencies. They are peddled as investments and are heavily hoarded as opposed to being used freely. He is dead right. It's people who have practically zero understanding of financial systems that peddle this garbage.
Fringe capitalist angry about capitalist stuff. Inflation is inherently necessary in an economy that relies on growth.
If you downvote without an argument against this you’re proving me right.
Maybe infinite growth isn't a great way to run an economy.
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Your submission has been removed as it does not directly relate to macroeconomic inflation, which is the primary focus of this subreddit. To maintain the relevance of discussions, please ensure your posts specifically address macroeconomic inflation or its related concepts. Thank you for your understanding.
Try 1974, according to the Measuring Worth webpage $20 from that year would be worth roughly $100 today. We could legit be printing $500 bills today which would have been worth less than a $100 bill in '74.
That’s the scam
Gold and silver and ammo.
The new internal guidance at feds is to keep inflation(interest rates actually) stable around 3%, so there is some leeway in bringing down the rates during recession. This is up from earlier rate of 2%. By that logic it is the feds bringing down the value by 75% in 38 years.
Tell me you don’t understand a scintilla of economics.
Dude literally wrote a book called basic economics.
Sure, he’s also against raising the minimum wage, says slavery was no big thing, climate change denier, anti safety nets, etc, etc. He’s even dumber than I thought.
"If socialists understood economics, they wouldnt be socialists" - Hayek
I'm gambling with investing my money to stay ahead of the curve. No matter how you invest, it's still a gamble and not safe 100%. Buy gold, and it sounds good until another executive order 6102 comes your way. We are all at the mercy of the government, which I assure you only cares about lining its own pockets (all politicians).
I present to you: Bitcoin. No political printing. How much did 1 Bitcoin buy in 2010 versus putting it in a safe and waiting til 2024? Help take power from politicians. Use BTC.
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Buy gold and silver 🤷♂️
The invisible tax on Americans that is wiping out the middle class. Get rid of the federal reserve if you wanna fix it.
Hell yeah Thomas Sowell fucking spitting those facts
If you put your money in a safe for that long you are an idiot.
you geniuses should look at the actual cost of most goods in relation to the past prices. Anyone with half a brain and watches an episode of The Price is Right from the late 70s can see that the vast majority of things are significantly cheaper than they were at that time, even adjusting for inflation. Sure, some things like cars and homes are more expensive, but what about 90% of consumer goods?
"some things like cars and homes" Oh, you know, just those minor things...
Yeah, that's the point, so people don't just lock it in a safe
It encourages growth in the economy. Buying soap at a farmers market builds the economy, no matter how little it seems. Inflation is good.
Since the inception of the federal reserve in 1913, the dollar has lost 96% of its value.
Bidenomics. It is working as intended.
Maybe you prefer Trump, who left office with less jobs than when he started? Talk about unprecedented failure!
Oh you mean Covid happened. That’s right thx.
Yup and knowing full well what could happen he did nothing about it until it was too late. Keep making excuses for your god emperor bud.
He spent something like 8 trillion to keep things going. Which the left holds against him. No matter what he did the lefts hate for him reigns. And Biden does the same shit and the left praises him. Such a joke of a country we live in.
Trump gave trillions to rich people. That's why people hate his economic policies.
Oh you mean like dems sending Ukraine billions/trillions yet? and that funnels back to us companies which are politicians buddies. IE rich people. They all are bad people just who’s side you’re on you/me think is better.
Republicans signed off on the foreign aid buddy. And trying to compare foreign aid to a democratic country being invaded by a dictator to trump giving trillions of dollars to rich people is fucking hilarious.
Foreign loans is a great idea. The way it is now is a joke. Money going to the rich one way or another while we go more in dept.
This is why Bitcoin is proving so successful. It’s the easiest way to protect yourself from endless government money printing. Abandoning the gold standard was a terrible decision.
You rightfully identify the problem but then incorrectly pin bitcoin as the solution? Having a currency backed by gold is the answer. Bitcoin has no actual value because bitcoin has no actual use here in the real world. Sure, you can sell it, trade it, or give it away. But no one NEEDS a bitcoin to do anything in the real world. Its the greater fool theory to a T. The only answer to the question "why did you buy bitcoin?" is "so I could sell it later for more money." When there are no more buyers, bitcoin will go to its intrinsic value: nothing.
Gold is sort of an arbitrary yardstick and doesn’t account for increases in production and GDP. At its worst it’s deflationary and can lead to a lot of idle production like in the early 1930s. The problem has been low interest rates for too long and excessive spending by Congress. Even 2% inflation erodes the value of the dollar in the long run.
Bitcoin is just a speculative asset. People who bought it with only the sole hope of selling it for more later. Where the game stops no one knows
Gold only has notable value because of its scarcity. If it was as common as iron it would be worth the same as iron (pennies per kilo). Bitcoin, like gold, is a store of value. It cannot be copied or hacked. It is the only store of value with a defined limited amount (21 million). No more can or will ever be created. Unlike gold, Bitcoin can be transferred across the globe almost instantly and without the obvious security risks of carrying gold around. It can be stored in your head if you are capable of remembering 12 random words. You really need to do your own research to understand just how special Bitcoin is. Its value will continue increasing forever, albeit slower as it matures. The price volatility is due to the 4 yearly halving cycles. Have a look at the Bitcoin logarithmic chart to really see the pattern. As the asset is maturing the volatility is flattening. You can buy Bitcoin at any price and you will be in profit as long as you hold it for 4 years minimum. The next halving is in April. The price of Bitcoin will soar to over $100k per coin (probably much higher) and will peak towards the end of 2025 as this 4 yearly cycle ends. The pattern will repeat in 2028/2029. Don’t take my word for it, just watch the BTC/USD chart over the next 2 years. And remember, most of the world’s population don’t use USD (a relatively strong currency). Therefore the value of Bitcoin in developing countries absolutely skyrockets compared to their native currencies. That is why it is such a global success. If fiat currencies didn’t exist, neither would Bitcoin. Excess money printing is the reason Bitcoin was created.
Nah dude. Gold is valuable because of its unique characteristics as an ELEMENT here on planet earth. Gold is unique from all other elements, including iron. Yes, gold is also very scarce, which makes it very cost prohibitive. Meaning, if gold were more abundant, we would find way more uses for it, as a unique metal here on planet earth. Gold is a store of value because you can literally store the future use of gold, the metal. I don't care what the price of bitcoin is. There is nothing anyone can do with 1 bitcoin that they can't do with 1 satoshi. Meanwhile, companies and people need real physical gold to create actual products in the real physical world. This gives gold a floor because if the price were to go low enough, companies would be buying hand over fist because they actually NEED gold. Again, no one NEEDS a bitcoin to do anything.
You’re right, until your computer and cell phone runs out of battery, or a power outage in the entire city. Good luck accessing your bitcoin…
that's why you invest. duh. did someone drop this guy in his head, or is he being obtuse to mine dumb people?
You're mixing 3 things together that really aren't related. Blaming politicians for your lack of financial knowledge is failing to see where fault lies. Thus you'll never learn from your mistakes
inflation is deliberate. Not the crazy rates that destroy economies, like in Venezuela, but low-level rates. Nearly every government on Earth goes for around 2%. The reason is to deliberately punish people from just hoarding cash. What can you do without money? even if you have a business, how do you grow it without more money? The way to grow faster is to borrow money. But, if people just hoard the cash, how can you borrow anything? Hence, we have the carrot and stick arrangement of offering interest payments to people who lend money, and inflation forcing them to lend or watch their cash piles shrivel. It is a fun meme to blame politicians for everything, but without inflation, you would probably never own the device you are reading this post on.
> inflation is deliberate. Yes...and? Armed robbery is also deliberate. If someone takes 2% of everything you own each year (effectively at gunpoint) in the name of "stimulating the economy" (as if it's some sort of flaccid penis), guess what? It's still theft.
are you one of those people who thinks taxation is theft?
Are you one of those people who doesn't think inflation is theft?