Re:Cryptocurrencies’ Carbon Footprint Underestimated
by danuker on Tuesday October 05, 2021 @03:53PM
(#28764728)
> but provided it isn't runaway levels that wreck an economy, I'm not even sure who it hurts.
It gives governments a tool to erode its liabilities while continuing to spend irresponsibly.
This hurts everyone not willing or able to take cheap credit.
Re:Cryptocurrencies’ Carbon Footprint Underestimated
by imtringued on Tuesday October 05, 2021 @05:03PM
(#28765606)
You know, it's not even intentional inflation. What the Fed is doing isn't creating inflation, it's moderating inflation downwards. Inflation simply happens through regular economic activities even if the government isn't involved. People borrow and spend their savings faster and faster, that's inflation. What the Fed is doing is like a PID control loop that hits the brakes when the economy is overheating. It needs 2% inflation as a buffer to achieve negative real interest rates. If arbitrary negative real interest rates were possible then the Fed could do price level targeting instead of inflation rate targeting and even in the latter the desired inflation rate could simply be 0% but any inflation shocks are permanent.
Honestly, I don't want to come across like I'm making an argument in favor of intentional inflation, but provided it isn't runaway levels that wreck an economy, I'm not even sure who it hurts. The poor are debtors. The middle class are the biggest holders of 30-year mortgages, which are about the best assets you can possibly hold when there is inflation. The rich hold their wealth in appreciating assets. Issuers of long-term debt and retirees who moved their savings into bonds and cash seem like the most likely to be hurt, but there are so many simple hedges they could have employed. Banks can issue long-term bonds so they're net zero debt holders rather than creditors. Retirees can move their savings into TIPS rather than cash.