Federal Reserve Chair Jerome Powell gives his thoughts on inflation risks, the economy, the timeline for cutting rates, the health of the country’s banks and...
…in terms of capitalism, this is horrible. How does an economy grow if the supply of money remains unchanged?
The economy will be able to grow just fine and normally: by producing an ever-increasing value of goods and services. We have good historical precedent for this: countries and empires that existed before the invention of paper currency. Or the US when it was on the gold standard. In a fixed supply currency economy, when the economy grows, the money becomes more valuable. A dollar is essentially a “share” of the entire US economy. If a company you have a share in becomes more valuable, what happens to your share of it? It becomes more valuable too. In a fixed currency economy, when the economy grows, the benefit is shared with all economic participants according to how much currency they have.
In an inflationary supply economy, when the economy grows, if supply inflation outpaces growth (which it is does) then the currency becomes less valuable. Meanwhile, value transfers to the people to printed the additional currency supply and whomever they decided to give it to.
Imagine how the world might look different if governments couldn’t print money at a whim. If they wanted to fund wars, they would have to raise taxes. That would not be popular. Might we end up with a more peaceful planet if that were the case?
If you expect your currency to generally appreciate in value, somebody has to really convince you to part with it. Might our goods be built to last? Be more repairable? More sustainable?. Perhaps, one can only speculate. Having money that loses its value over time forces people to spend it as quickly as possible. The faster your money depreciates, the more wreckless you will be with spending because even getting your 15th blender is worth more than your 100 Turkish Lira will be in a month. A currency which loses value by design fuels needless consumption/production. On a planet with finite resources, this is a questionable incentive to have in our economic system.
@makeasnek@PeepinGoodArgs This is cope. Even El Salvador couldn’t use Bitcoin as currency, had to layer Lightning on top of it to make their situation work for them.
Bitcoin is turning 16 this year, there is no more mystery to the damn coin!
Lightning is an international open-source protocol, not something El Salvador made. It’s a layer on top of Bitcoin which makes transactions settle instantly for pennies in fees while using the underlying Bitcoin blockchain for security. Similar to how venmo is a layer on top of the existing banking system. El Salvador has no say in how Bitcoin is administered.
@makeasnek The administration or lack of it is not what makes Bitcoin useless as a monetary currency. Bitcoin is useful for many other things but that’s not one of them.
The economy will be able to grow just fine and normally: by producing an ever-increasing value of goods and services. We have good historical precedent for this: countries and empires that existed before the invention of paper currency. Or the US when it was on the gold standard. In a fixed supply currency economy, when the economy grows, the money becomes more valuable. A dollar is essentially a “share” of the entire US economy. If a company you have a share in becomes more valuable, what happens to your share of it? It becomes more valuable too. In a fixed currency economy, when the economy grows, the benefit is shared with all economic participants according to how much currency they have.
In an inflationary supply economy, when the economy grows, if supply inflation outpaces growth (which it is does) then the currency becomes less valuable. Meanwhile, value transfers to the people to printed the additional currency supply and whomever they decided to give it to.
Imagine how the world might look different if governments couldn’t print money at a whim. If they wanted to fund wars, they would have to raise taxes. That would not be popular. Might we end up with a more peaceful planet if that were the case?
If you expect your currency to generally appreciate in value, somebody has to really convince you to part with it. Might our goods be built to last? Be more repairable? More sustainable?. Perhaps, one can only speculate. Having money that loses its value over time forces people to spend it as quickly as possible. The faster your money depreciates, the more wreckless you will be with spending because even getting your 15th blender is worth more than your 100 Turkish Lira will be in a month. A currency which loses value by design fuels needless consumption/production. On a planet with finite resources, this is a questionable incentive to have in our economic system.
@makeasnek @PeepinGoodArgs This is cope. Even El Salvador couldn’t use Bitcoin as currency, had to layer Lightning on top of it to make their situation work for them.
Bitcoin is turning 16 this year, there is no more mystery to the damn coin!
Lightning is an international open-source protocol, not something El Salvador made. It’s a layer on top of Bitcoin which makes transactions settle instantly for pennies in fees while using the underlying Bitcoin blockchain for security. Similar to how venmo is a layer on top of the existing banking system. El Salvador has no say in how Bitcoin is administered.
@makeasnek The administration or lack of it is not what makes Bitcoin useless as a monetary currency. Bitcoin is useful for many other things but that’s not one of them.