Re:Cryptoeconomics: Paving the Future of Blockchain Technology
by neffy on Saturday July 22, 2017 @09:40PM
(#14830473)
I wouldn't just blame the Fed. There are multiple feedback loops currently concentrating funds in the financial sector. The US monetary system is one of the fairly stable ones - it has a remarkably constant monetary expansion rate at around 2x/ decade (compare and contrast with Russia which is up there at 20x decade).
Correct for the monetary expansion rate, rather than CPI, and you can get a reasonable idea of how the prices of real goods are actually dropping over time, as are the majority of people's salaries, as money gets sucked into the financial sector primarily as a side effect of loan securitisation, and crony taxation policies.
In a technological economy, we would expect to see prices for real goods continually dropping, as decreasing prices are the expected result of market optimization. However, the Federal Reserve closes the feedback loop for consumers but injecting money into the financial sector. Thus to make the CPI constantly rise, everything that is tied to the financial sector (housing, cars, healthcare) shoots through the roof. And this isn't even just a direct handout to consumers looking to spend, but a bigger debt ballchain that they're expected to pay interest on!