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by anonym2913 hours ago |
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upvoteby lxgr12 hours ago|
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>> You don’t want your actual currency to gain value just by waiting

> You might not, I do.

Then you don't want a currency. For something to be money it needs to (among other things) be a medium of exchange, and nobody really wants to trade away a thing today if they know it will be more valuable tomorrow.

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upvoteby Arnt11 hours ago|
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Yeah, I want the assets I hold to increase in value, too, or at least not decrease.

Suppose you have some control over currency. You run a country. I'm that case, so you still want the currency to gain value compared to the alternatives?

Your choice is basically: holding currency is more profitable than building a house or running a business (or lending to those who do), or else less profitable. If you run a country, do you want houses and jobs and all that kind of thing, or do you want people to do better if they choose to hoard currency?

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upvoteby hackernudes11 hours ago|
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What about when the US dollar was backed by gold? Were there no houses or businesses?

If I need a house today I'll buy it. I might not invest in real estate or stocks as much if my currency will be worth more tomorrow but I'll still buy stuff I need or want badly enough.

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upvoteby Arnt3 hours ago|
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The price of gold was fixed in the US in that period. Gold lost buying power as the years passed.
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upvoteby echoangle13 hours ago|
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I mean as someone managing a state. If there’s a guaranteed way to make money by holding your currency, you’re not really incentivized to invest your money in semi-risky endeavors. Why would I fund a company to make me some single digit returns if I can just hold the money? If the central bank would actively enforce a deflationary currency, nobody would invest anymore.
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upvoteby gabruoy12 hours ago|
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This justification never makes any sense to me. There’s already a safe way to make a percentage back that will generally be higher than inflation: government bonds, offered by the very same government that supposedly wants inflation. There are even TIPS bonds in the US that match inflation directly. And people do measure whether or not a risky investment will make more than just holding bonds. Inflation just screws over people who don’t have the ability to invest their money into other assets.
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upvoteby lesuorac12 hours ago|
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If you buys bonds you’re not sitting on money.

The bond seller is intending to put it to productive use to generate the yield.

This differs from deflation where people will (more the before) actually sit on money and not buy bonds. Then people who need liquidity cannot get it as the money supply drys up.

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upvoteby gabruoy12 hours ago|
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This is true for corporate bonds, but governments plan on generating their bond revenue by taxing citizens (which I guess could be a whole separate conversation on whether or not that’s productive) and by printing more currency, which seems rather circular in logic.
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upvoteby throwawaythekey12 hours ago|
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There's still relative rates of return i.e. 100% of money isn't in gov bonds even though it should outperform inflation
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upvoteby ForHackernews13 hours ago|
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Why do cryptobros always refuse to admit investing exists? Forex and crypto trading are always zero sum, but you don't have to choose between dollars under your mattress or bitcoin on a thumb drive, you can actually invest in productive assets.

SPY has outperformed BTC over the last 5 years, and with far less volatility.

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upvoteby ajjahs12 hours ago|
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