I seen some stuff talk about many of our problems is caused by our money inflating and not deflating

[Thatdude]

It should be noted this came from some crypto pro place. One of the places that talks about this argument is


But basically it talked about how many of our problems is caused by our current economical system across the world. Where money constantly gets devalued by the printing of more money. Where $1 today will require you $1.25 in a few years to buy the same thing. And with places like the USA making 10%-20% of it's total currency in the past few years. This means the problem gets worse quicker.

The argument is by having a inflating currency it causes people in the lower classes to buy what they can now since if you hold on your money you can't buy it later. Like the cheapest time to buy something is always yesterday. And it causes upper classes to put their money in investments just so they can keep their value or get more. This entire process forces people to go into debt because peoples pay doesn't match up to the inflation, and people can't accurately save up for the future unless if they are in the higher mid to upper class. This means it causes the poor to become poorer, and the richer to become richer.
The argument also said if we had a deflating currency then this will force people to save your money since the cheapest time to buy something will always be tomorrow, pay will always increase by the fact that money is deflating, it helps out in other ways.

Since a lot of people off themselves due to money problems, I figure this is a good place to post this to figure out what others think. Do you think they are onto something? Or do you think a deflating currency won't fix much of anything?

 

[Makko]

Remember that money is ultimately nothing but a storage of human effort. Inflation forces people to keep working and punishes sitting around doing nothing, which is the whole point. Deflation rewards people for sitting around and doing nothing, which would cause society to fall apart.

 

[Thatdude]

Remember that money is ultimately nothing but a storage of human effort. Inflation forces people to keep working and punishes sitting around doing nothing, which is the whole point. Deflation rewards people for sitting around and doing nothing, which would cause society to fall apart.

Not exactly. You still have to work and what not. It just rewards people for living frugal. Prior to getting away from the gold standard. We were in a deflation economy since there was a limited amount of gold and the use only increased the overall value.

People didn't sit around then. And I feel like if you have worker rights, access to good education, and so on. Encouraging people to save money due to deflation will cause less of a class divide and allow for more equality between the classes

 

[Makko]

Not exactly. You still have to work and what not. It just rewards people for living frugal. Prior to getting away from the gold standard. We were in a deflation economy since there was a limited amount of gold and the use only increased the overall value.

People didn't sit around then. And I feel like if you have worker rights, access to good education, and so on. Encouraging people to save money due to deflation will cause less of a class divide and allow for more equality between the classes

Your definition of "saving" is sewing the money into your mattress where they don't do any good. It's pefectly possible to "save" in an inflation economy, which is by investing. In order for an economy to grow, people have to work and produce things, and other people have to buy them, otherwise there's no profit in producing and production stops, causing the economy to shrink. They can only work and produce things if someone invests money to pay their salaries, and they will only want to buy things if they know the price will rise tomorrow. Inflation forces people to invest, so that other people will work and produce things.

In times of gold, inflation was produced by digging up more gold. When there was no more gold to dig up and it began deflating, people sewed their gold into the mattress and stopped buying things, which caused other people to stop producing things, which caused the economy to shrink, which caused the gold standard to be abandoned.

 

[Thatdude]

Your definition of "saving" is sewing the money into your mattress where they don't do any good. It's pefectly possible to "save" in an inflation economy, which is by investing. In order for an economy to grow, people have to work and produce things, and other people have to buy them, otherwise there's no profit in producing and production stops, causing the economy to shrink. They can only work and produce things if someone invests money to pay their salaries, and they will only want to buy things if they know the price will rise tomorrow. Inflation forces people to invest, so that other people will work and produce things.

In times of gold, inflation was produced by digging up more gold. When there was no more gold to dig up and it began deflating, people sewed their gold into the mattress and stopped buying things, which caused other people to stop producing things, which caused the economy to shrink, which caused the gold standard to be abandoned.

The problem with investing to save other than the obvious is lower classes can't. Like it takes every dime and sometimes then some to make it. Like many are in debt for a reason.

In a deflation economy this can happen, but it gets easier over the debt and work your way up. This is assuming your pay isn't lowered. And if done right the deflation should be by much anyways

 

[saltshaker]

Remember that money is ultimately nothing but a storage of human effort. Inflation forces people to keep working and punishes sitting around doing nothing, which is the whole point. Deflation rewards people for sitting around and doing nothing, which would cause society to fall apart.

^ this.

Although for the record, I like that crypto exists because fuck working. I want to sit on my ass and do nothing, I couldn't care less if the economy grows or shrinks. :)

 

[All Things Must Pass]

Remember that money is ultimately nothing but a storage of human effort.

What is this, do you seriously believe in the meritocracy bullcrap?

 

[Makko]

What is this, do you seriously believe in the meritocracy bullcrap?

Who said that?

The problem with investing to save other than the obvious is lower classes can't. Like it takes every dime and sometimes then some to make it. Like many are in debt for a reason.

In a deflation economy this can happen, but it gets easier over the debt and work your way up. This is assuming your pay isn't lowered. And if done right the deflation should be by much anyways

Deflation increases the value of debt. If you have debt and the currency is deflating, your debt will be harder to pay off. Deflation makes people to stop borrowing, which makes them stop buying, which makes them stop producing, which puts them out of work, which causes the economy to implode. This is highschool level economics. "Living frugal" is a terrible mistake on the large scale.

Even in the fantasy world you describe, the only ones to gain from deflation are the ones already sitting on a pile of money that can then rise in value. The lower classes will gain nothing because their wages will be adjusted down in a deflation economy, just like they are adjusted up in an inflation economy. And soon enough they won't have any wage at all because nobody is hiring.