Inflation doesn’t take from the rich evenly, because the rich are more likely to be close to the initial distribution of the created money (close to government and banking instruments) and so are more likely to use it before any price change effects take effect. This also gives a financial incentive for the rich to cozy up to government. (They buy current-priced goods with new money, then that money is passed between hands and eventually may cause a decrease in price, but long after the initial user has gotten the greater benefit.)
And @Artiscience if you don’t mind, I would request that you can start using a neutral word for keeping value in currency, instead of “hoard”. Spending versus saving is a perfectly neutral way to describe it. Using “hoarding” every time puts your comments in a Central Banker context as though not spending money but saving is an evil act of some kind. Your use puts a household who has prepared for future adversity by saving value of some kind to help in times of emergency in a negative moral light.
I think it’s more that saving causes problems for central bankers’ plans that it is viewed negatively by those kinds of economists (state economists you could say), which is why they would view them as “problem hoarders”. Saving also “hides” money from the state, which wants to be able to take them as taxes. So for both the rich-politically-connected and the politician-bureaucrat groups, saving fiat currencies is a problem, but only to their little racket. In a general audience, I think we could discuss it neutrally, hopefully, since we aren’t speaking from those privileged positions.
Aha, I guess that puts me for you in a “Central Banker context” in the same way that I advocate demurrage, which - as we all know - Central Bankers are really supportive of… I couldn´t care less.
P.S.: “Saving” is not a neutral word either and I don´t see why I should exchange my biased word of choice with yours.
I realize now you actually believe it is evil to save money… which I didn’t initially consider. If “saving” is biased to you, perhaps “possessed” “keeping” or “held” wouldn’t color the perception of the actions it describes.
“Demurrage” - An imposed tax on money to prevent it being “held” for a period of time. A penalty for not spending money. We could just call it a money possession tax but Demurrage does sound cooler.
[quote=“eggmunkee, post:274, topic:4799”]
“Demurrage” - An imposed tax on money to prevent it being “held” for a period of time. A penalty for not spending money. We could just call it a money possession tax but Demurrage does sound cooler[/quote]
Aw…yeah, we could call it metal-box-that-drives-on-tyres, but car sounds cooler, lol. What was your point again?
You know, I am really fine with you having a different perspective on economics, so why don´t we just leave it here and skip the part where you try to ridicule my stance?
My point was just try to neutralize my biased word and define a concept you were using but I wasn’t familiar with simply. It may not have been valuable to others, but I thought it might be. Not that I don’t do this as well, but I felt that your word choice was making discussion difficult by including the connotation of “bad” in the word.
I should have probably left off the “sounding cooler” comment; it’s not a real critique, but I can only hope it brightened your day. I generally have a bias against jargon and euphemisms which seem to be used to hide or excuse immorality or other double standards of an authoritative body. Also, the opposite where everyday in fact moral actions are described by authorities to make the innocent seem evil. It feels like a kind of lying, but it’s really that the subjective connotations are unsettling. I am fine with you having a different perspective on economics, as well. I will try not to engage in ridicule.
Alright mate, no hard feelings Sometimes communication is a pain in the ass. To add some content, I also dislike jargon, but I don´t believe in neutral language either.
Gates once commented that if people would just save it would take down the rich. At least I’ve heard this again and again. The economists have their paradox of thrift jargon and make a good case for its ill effects in current economies but what is wrong with ordinary folks having a way to get off the treadmill, when inflation means they have at least an imperfect means and incentive to abstract a portion of the capital and put it back in the stream with reduced risk? It may be hard to work with a lot of people removing capital from the stream of commerce but at some point we are going to have to let the machines deal with depreciation. We can’t go on with rent seeking investors in a rigged casino market. Why should insurance proceeds for instance be invested when its just elevating risk and cost when lower risk and cost for insurance would be a higher good? Why insure something by handing money to gamblers? The money system and patent system should be set up to serve ordinary people not professional gambling addicts and opportunists. We need direct ways to keep the capital with the people including cutting the cords.
Here’s some food for though on this topic of Inflation. Here’s the inflation rates:
Gold - 1.5% (new supply mined per year)
Fiat - 2% (typical target set by governments)
Bitcoin - 4.1%
Bitcoin should approach that of gold by 2020 with 1.7% inflation. But perhaps the real world practicalities of people losing their keys in effect makes Bitcoin deflationary. I’ve yet to see any crypto-currency be truly deflationary by design which means reducing the money supply over time.
One thing to be careful of is the difference between monetary & price inflation.
The inflation rate you’ve mentioned for gold & Bitcoin is monetary inflation, and for fiat, it’s price inflation.
Money supply growth of fiat currencies is often far above the price inflation rate, which is what people generally care about as it affects them day to day.
While crypto-currencies haven’t been designed to be deflationary in a monetary sense (not very practical, except through loss as you mentioned), the long term supply limit means they will see price deflation, as long as demand outstrips supply growth. In this sense, crypto-currencies like Bitcoin & SafeCoin are likely to be deflationary.
USD M supplies go into Stock Bubbles , always the same players , never
hitting or trickling down to the normal citizen . Such an inflation is : Theft
A limited total supply of safecoin (currently MAID replacement token ) will give confidence in value appreciation and thus the network will remain attractive and grow , as safenet demand and utility increases more safecoin will also be spent and more will be trying to farm , the algorithms will adjust to these situations . It will take a good while to ever reach the maximum amount of safecoins of roughly 4.2B
Deflation encourages hoarding, because I can increase value just by doing nothing.
However, there may be stuff I really want right now (i.e. I value the benefits of owning the product, using the service, etc more than the expected future value of my money), so I will pay for it anyway
I read somewhere that major currencies, backed as they were by gold, underwent a mild deflation during the century from the end of the Napoleonic wars until WW1, and that that was an unprecedented period of economic growth. Monetary stability combined with technological development and discovery of new resources all combined to enable everyone to buy more goods with the same amount of money.
Even though BTC is deflationary, all I see are the people investing their new found deflationary generated wealth into further ventures. Take a look at who’s investing into all of the new crypto-currency ventures. It’s human nature to want to grow their investment holdings, beyond greed it’s fun.
Sometimes communication is a pain in the ass. To add some content, I also dislike jargon, but I don´t believe in neutral language either.
