Re:Why inflation is not a threat
by imtringued on Sunday March 14, 2021 @02:43PM
(#26457666)
>I think that another deception is that we should ordinarily be experiencing price deflation. Every day our society is getting more efficient at making things. If prices for goods are staying the same then it may not be that their value has not changed, they may be less valuable goods, but they cost the same because you're also buying them with less valuable currency.
Deflation is what happens when there is an oversupply of products. Primarily caused by increased productivity through technological progress. You have to print more money just to maintain stable prices. If you didn't do this then companies would cut down on production capacity and simply produce less goods. This would cause a downward spiral of production and since we all know that fiat currencies are backed by the existence of an economy that lets you exchange the fiat currency for goods and services the fact that the economy is shrinking is a bad thing for holders of the currency and it's bad for workers who are receiving incomes in the future. Since we cut down on production we also need less workers and thus your future income will be lower. Your best bet would be to obtain wealth as soon as possible and simply sit on it.
>Ultimately, printing money doesn't make anyone more productive or produce anything. All it does is redistribute wealth from those that were first to get the new free money away from those that were last to contact it.
It could be worse. Since you print money every year that means future people will receive the money first. If you cease to print money then the ones who received it first are people in the past which could be centuries ago.
Would you be willing to work for someone who inherited their wealth 200 years ago and did nothing with it except sit on it? By "sit" I mean scrooge mcduck vaults. No investments.
Deflation is what happens when there is an oversupply of products. Primarily caused by increased productivity through technological progress. You have to print more money just to maintain stable prices. If you didn't do this then companies would cut down on production capacity and simply produce less goods. This would cause a downward spiral of production and since we all know that fiat currencies are backed by the existence of an economy that lets you exchange the fiat currency for goods and services the fact that the economy is shrinking is a bad thing for holders of the currency and it's bad for workers who are receiving incomes in the future. Since we cut down on production we also need less workers and thus your future income will be lower. Your best bet would be to obtain wealth as soon as possible and simply sit on it.
>Ultimately, printing money doesn't make anyone more productive or produce anything. All it does is redistribute wealth from those that were first to get the new free money away from those that were last to contact it.
It could be worse. Since you print money every year that means future people will receive the money first. If you cease to print money then the ones who received it first are people in the past which could be centuries ago.
Would you be willing to work for someone who inherited their wealth 200 years ago and did nothing with it except sit on it? By "sit" I mean scrooge mcduck vaults. No investments.