A small amount is good. Deflation makes it so not spending money is more beneficial. The longer you wait to spend the more the money is worth. This causes fewer products and services to be purchased, which pays for wages. Inflation makes the opposite true. The longer you wait to spend your money the less it’s worth. It encourages spending, not saving. Inflation that outstrips increases to pay is obviously very bad though.
Note that a critical part of that equation is that wages are included in the inflationary trend.
But other than that explicit detail, that’s spot on. Ultimately money is a “trick” we use to influence our productive behavior. So a slightly creeping number works best to make the “money” move instead of sit still, and the whole point of the mathematical model is that the things need to move around.
With all of the credit balances being carried, I question the whole “people will just wait instead of spending because it will be more financially advantageous”. I’m also not so sure we really need an economic system that encourages and depends on increased consumption. It would be nice if we had a system that could handle inflation, stagnation, and deflation without imploding on itself.
To me, the biggest factor is that it means debt burdens get lighter over time, assuming you are at least covering interest (if not then interest will outpace inflation, though even the growing debt will be cheaper over time vs what it would be without inflation). Oh, also assuming wages match inflation, which is the other big factor. Your employer can save money over time just by being stingy with raises.
This is just plain wrong. The majority of people don’t get to “decide” to spend/save, they live paycheck to paycheck. The people that can make that decision are actually incentivized to NOT spend but to “invest” (aka loan) because interest rates are higher, and thus get better returns.
Inflation is really a wealth transfer from the poorest to the wealthy since wages don’t keep up with inflation.
Now you can figure out why deflation is considered a bad thing by mainstream media.
Most of the time most wages do keep up with inflation. Minimum wage should in a reasonable country as well. Also, most people can totally defer spending some money. Not for food and rent and other necessities, but for other things, like getting your car fixed or things like that that can be pushed off for later.
True, yeah. Rent inflation is making things real bad. The past little while almost no wages have kept up with regular inflation even. Generally though, most wages have kept up with both, but recently in particular things have gotten fucked.
Just luxury spending and underperforming investments. Essential spending can’t be deferred, and worthwhile investments will outpace any natural rate of deflation. Forced inflation drives conspicuous consumption and malinvestment, but in doing so it increases monetary velocity, which helps bankers and tax collectors extract higher rent from the economy.
Currency isn’t worth a shit cause it ain’t money. Money should be out of all stable saving of value. Gold is money, precious metals are money, diamonds are money. Currencies are worthless shit created to infinity by banks and hold together by enforcement of governments which are deep in debt to those bank so cannot do a fucking shit about that. All of our tax money goes straight to banks.
Precious metals are commodities, money is used to exchange commodities. Using a commodity as money is obsolete. I get that youre mad at the feds but that’s a systemic problem, not moneys fault. Its like getting mad at biotech for the practices of Bayer.
These commodities are not inherently valuable, the labour required to extract them is what gives them valuable.
Yeah of course, you can always trick people into believing something has value when it doesn’t. But as long as you know where value comes from, no one can trick you into buying a Pokemon card.
Gold is not money. Gold is something that some people value but has no value in itself. It’s useful in small quantities for electronics, but other than that it just looks pretty. It has almost no utility. If an apocalypse happens and society fails, gold won’t be worth anything. If people need food, water, shelter to survive, they won’t accept your gold for payment. They can’t eat that. Booze may be a good item that will retain value well, but gold will not.
Currency is a very useful tool to gauge the worth of dissimilar items used for trading. It’s a trait known as fungibility. Without it, we’re in full barter mode. The barter system is… deeply flawed for one reason. If you don’t have anything the seller wants, you’re SOL. You wanna buy food, but don’t have gold, silver, or a skill that the food vendor needs? Well, you’re going to be hungry. Abstracting value to a useless piece of paper that denotes a value, and is enforced by the power of the land (a government) means that paper can buy food, shelter, comforts, whatever you need. It’s an objectively better system.
Learn your history dumb fuck. You don’t have to believe me. You still haven’t answered what’s to gain by pissing tax payers money away to a failed eastern bloc state that formerly peddled weapons to our enemies.
A small amount is good. Deflation makes it so not spending money is more beneficial. The longer you wait to spend the more the money is worth. This causes fewer products and services to be purchased, which pays for wages. Inflation makes the opposite true. The longer you wait to spend your money the less it’s worth. It encourages spending, not saving. Inflation that outstrips increases to pay is obviously very bad though.
Note that a critical part of that equation is that wages are included in the inflationary trend.
But other than that explicit detail, that’s spot on. Ultimately money is a “trick” we use to influence our productive behavior. So a slightly creeping number works best to make the “money” move instead of sit still, and the whole point of the mathematical model is that the things need to move around.
With all of the credit balances being carried, I question the whole “people will just wait instead of spending because it will be more financially advantageous”. I’m also not so sure we really need an economic system that encourages and depends on increased consumption. It would be nice if we had a system that could handle inflation, stagnation, and deflation without imploding on itself.
To me, the biggest factor is that it means debt burdens get lighter over time, assuming you are at least covering interest (if not then interest will outpace inflation, though even the growing debt will be cheaper over time vs what it would be without inflation). Oh, also assuming wages match inflation, which is the other big factor. Your employer can save money over time just by being stingy with raises.
This is just plain wrong. The majority of people don’t get to “decide” to spend/save, they live paycheck to paycheck. The people that can make that decision are actually incentivized to NOT spend but to “invest” (aka loan) because interest rates are higher, and thus get better returns.
Inflation is really a wealth transfer from the poorest to the wealthy since wages don’t keep up with inflation.
Now you can figure out why deflation is considered a bad thing by mainstream media.
Most of the time most wages do keep up with inflation. Minimum wage should in a reasonable country as well. Also, most people can totally defer spending some money. Not for food and rent and other necessities, but for other things, like getting your car fixed or things like that that can be pushed off for later.
Ignore rent inflation and sure, wages are keeping up 😅
True, yeah. Rent inflation is making things real bad. The past little while almost no wages have kept up with regular inflation even. Generally though, most wages have kept up with both, but recently in particular things have gotten fucked.
Does deflation decrease all spending or just luxury and investments?
Just luxury spending and underperforming investments. Essential spending can’t be deferred, and worthwhile investments will outpace any natural rate of deflation. Forced inflation drives conspicuous consumption and malinvestment, but in doing so it increases monetary velocity, which helps bankers and tax collectors extract higher rent from the economy.
Currency isn’t worth a shit cause it ain’t money. Money should be out of all stable saving of value. Gold is money, precious metals are money, diamonds are money. Currencies are worthless shit created to infinity by banks and hold together by enforcement of governments which are deep in debt to those bank so cannot do a fucking shit about that. All of our tax money goes straight to banks.
You try too pay for potatoes and pork with a krugerrand and tell me how that works out
With a what?
A KRUGERRAND!
They are gold coins minted in South Africa. One of the most popular coins for people who want to own gold.
Precious metals are commodities, money is used to exchange commodities. Using a commodity as money is obsolete. I get that youre mad at the feds but that’s a systemic problem, not moneys fault. Its like getting mad at biotech for the practices of Bayer.
These commodities are not inherently valuable, the labour required to extract them is what gives them valuable.
Or, in the case of diamonds, artificial supply restriction, marketing, and demand.
Yeah of course, you can always trick people into believing something has value when it doesn’t. But as long as you know where value comes from, no one can trick you into buying a Pokemon card.
Gold is not money. Gold is something that some people value but has no value in itself. It’s useful in small quantities for electronics, but other than that it just looks pretty. It has almost no utility. If an apocalypse happens and society fails, gold won’t be worth anything. If people need food, water, shelter to survive, they won’t accept your gold for payment. They can’t eat that. Booze may be a good item that will retain value well, but gold will not.
Least insane libertarian.
Currency is a very useful tool to gauge the worth of dissimilar items used for trading. It’s a trait known as fungibility. Without it, we’re in full barter mode. The barter system is… deeply flawed for one reason. If you don’t have anything the seller wants, you’re SOL. You wanna buy food, but don’t have gold, silver, or a skill that the food vendor needs? Well, you’re going to be hungry. Abstracting value to a useless piece of paper that denotes a value, and is enforced by the power of the land (a government) means that paper can buy food, shelter, comforts, whatever you need. It’s an objectively better system.
What’s the payoff in sending billions to the state known as Ukraine aka the former world’s largest illicit arms trafficker since the fall of the ussr?
What’s the payoff of you inserting obvious Russian propaganda spam into a story about American labor?
There is none. Go away.
Learn your history dumb fuck. You don’t have to believe me. You still haven’t answered what’s to gain by pissing tax payers money away to a failed eastern bloc state that formerly peddled weapons to our enemies.