Inflationary vs Deflationary Economic System

Justin Torres
Justin Torres

Wouldn't a deflationary currency like BTC be a better medium for exchange than the inflationary fiat dollar?

Saving is discouraged with an inflationary currency, as one needs to at least beat the rate of inflation. Long term, bank deposit rates are less than long term inflationary rates. Meaning that even if you always shopped for the best rate, you would never beat inflation long term with fiat.

A deflationary currency would encourage savings by default, as one would save and know for sure their currency will be worth more in the future. A deflationary currency would also encourage scarcity, efficiency and low prices. Eventually business may even offer gods and services for less than cost since the deflationary value of the currency would increase at some point.

I think we were all tricked into believing a fiat inflationary dollar is the best system. It creates the illusion of growth by inflation, allows ever increasing prices, hurts savers/retirees, and hurts the poor disproportionately.

The printing press fiat dollar really doesn't make sense. Growth can exist without inflation.

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Other urls found in this thread:

en.m.wikipedia.org/wiki/Behavioral_sink

Aiden Taylor
Aiden Taylor

blocks your path

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Liam Gray
Liam Gray

you retard fell for the deflation memes and dumb muh le joo central bank conspiracies.

these retards think that low prices = you being richer when in reality low prices = falling wages. It doesn't matter if stuff are cheap if your income is also getting smaller, you would still be even poorer in the end

Joshua Harris
Joshua Harris

Falling prices and lower wages also exist in an inflationary environment for lower wage workers (think Amazon and Walmart). Surely, at least the wageslave would do better in a deflationary environment particularly if a minimum wage is kept and readjusted every few years. The incentive to save and be efficient would be astronomical. The lack of confidence is objectively bullshit. If I get paid less but it still buys the same amount of stuff, other things equal, my confidence is unchanged. My confidence is then pumped when I see a large savings and I go out and treat myself.

Samuel Rodriguez
Samuel Rodriguez

incentive to save
saving = putting money under the mattress, the most retarded and useless thing you can do. If you want to beat inflation simply buy bonds, thats literally the easiest and safest way to do it. If you can't beat inflation that is like 2-3% you must be an absolute brainlet

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Andrew Murphy
Andrew Murphy

The printing press fiat dollar really doesn't make sense. Growth can exist without inflation.
Wouldn't a deflationary currency like BTC be a better medium for exchange than the inflationary fiat dollar?
Yes

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Brayden Robinson
Brayden Robinson

There's plenty of reasons and investment vehicles to save money (401ks, IRAs, FSA, HSA, index funds, etc. ) often with tax advantages but people are either don't know about these, don't have enough money or budgeting skills to invest, or are plain foolish. I suggest you do your research before you keep making a fool of yourself.

Leo James
Leo James

Bonds carry the highest interest rate risk, retard. That's literally the reason banks pay multimillions for models that predict the their effective book value when interest rates move.

I can't believe you posted a brainlet picture about beating inflation and suggested to buy bonds whose largest risk is INTEREST RATE RISK! The ABSOLUTE STATE OF BIZ.

You are an absolute fucking retard.

Landon Cruz
Landon Cruz

holy fuck, people THIS dumb actually exist

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Easton Roberts
Easton Roberts

BTC lost 50% of its value in under 12 months. It took decades for the dollar to do that. BTC isn't even deflationary.

Luke Cooper
Luke Cooper

OY VEY SHUT THIS THREAD DOWN NOW

Isaiah Wood
Isaiah Wood

beat inflation
bonds

Kill yourself. Inflation is the largest single risk to bonds. A 5 second google search will teach you this. You are literally a brainlet lol. Absolutely btfo

Christopher Morgan
Christopher Morgan

part 2

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William Gomez
William Gomez

man you really are this dumb. Inflation =/=reflation

go learn the basics of economics before embarrassing yourself online kiddo

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Nathaniel Rodriguez
Nathaniel Rodriguez

HURRRR DURRRR

le brainlet poster BTFO

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Ethan Parker
Ethan Parker

hurr i did a googl search now im like expert n economics n stuff!!

lmao brainlet. retards like you will ALWAYS stay poor and then go online and blame jews and guberment for being poor. stay dumb and poor brainlet

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Ayden Bell
Ayden Bell

orange man bad

Bentley Ortiz
Bentley Ortiz

now thats just sad

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Logan Ward
Logan Ward

Nice non-sequitur.

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Ryder Garcia
Ryder Garcia

Stop arguing with the fucking jew and killing the thread dumbass. Anybody who isnt retarded can already see it

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Hudson Cruz
Hudson Cruz

If a currency is persistently deflationary the best thing to do is spend as little as possible as a consumer so to capitalise on your higher purchasing power in later periods. This obviously hinders aggregate economic activity and ultimately growth. As a serious question, is there a counter to this argument?

Kevin Myers
Kevin Myers

RAT FORCE 6 HERE TO SLIDE YOUR THREAD

HERE'S A BRAINLET PICTURE GOYS

LOOK I EVEN RENAMED FILE SO YOU CAN'T CHECK OTHER POSTS I HAVE MADE ON THIS BOARD WITH THE SAME PICTURE AREN'T I SNEAKY?

SORRY WHAT WAS THE OP ABOUT?

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Landon Reyes
Landon Reyes

is there a counter to this argument?
da jooz!!

Cooper Fisher
Cooper Fisher

Yes, the environment will collapse if we keep consuming more and more and you'll be properly fucked then regardless of your bank account.

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Isaac Ortiz
Isaac Ortiz

the environment will collapse
how does an environment collapse exactly?

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Liam Bennett
Liam Bennett

This is what I really want to talk about.

Would there ever be a point where the consumer's purchasing power would get so high that spending would not cause a dramatic adverse affect to the consumers savings?

In other words, after 10 years, my savings can buy so much more that I am actually inclined to spend more (even accounting for the fact that the spent savings will be worth more in the future). If this is proven to be true, I would completely negate the main arguement against a deflationary system.

Evan Turner
Evan Turner

Too many people not enough land are you retarded user?
Land doesn't increase in quantity to match higher population or greater consumption.

Levi Fisher
Levi Fisher

hurr land
you are fucking retarded. there is enough land on earth to fit quadrillions of humans

Brayden Ramirez
Brayden Ramirez

How much land does it take to generate a day's supply of tendies?
You're a fucking shill on a crypto scam board.

Carter King
Carter King

If economic growth was manifested from productivity gains rather than nat. resource expenditure then yea perhaps infinite growth is possible. But the issue of sustainable economic growth is another debate entirely, lets stick to inflation vs deflation.

Not sure I understand what you mean, are you asking whether there's a point where consumers have enough savings/wealth that they don't care about the future appreciation of their savings, so they just spend today like we do now? That's certainly possible, basic intertemporal utility theory right? People discount future wealth at a higher rate, so that they end up preferring to spend today rather than accumulate more savings (because they've already satiated themselves with existing high levels of wealth). But its obviously a tradeoff though right, so if theyre spending more today and not saving, eventually their wealth/purchasing power will decline as well.

Not sure if I understood your point correctly though so correct me if I'm wrong.

Ryder Clark
Ryder Clark

spend as little as possible
I've never understood this argument. If currency was persistently deflationary I would want to use my savings as capital to acquire more of it. Unless the currency was deflationary to such an extent that the benefits of saving outweigh the potential profits in riskier investments or starting a business, I fail to see how spending as little as possible is the inevitable outcome for anyone but the most risk intolerant.

Leo Thomas
Leo Thomas

land is not an issue with greater productivity. High rise accomodation, high rise farms, high rise factories etc. We're a very long way from that though.

Isaiah Morgan
Isaiah Morgan

it just becomes a large opportunity cost of another investment - you'd have to return more than the 3% (example) return you'd get from the deflating currency on a risk adjusted basis. A sure bet with those kind of returns would become many people's preferred investment. Compare that to an inflationary environment where if you don't invest or contribute to the economy you'll lose out/get 'taxed' 2% or whatever inflation is. So whilst some people would still invest on the whole you'd have more saving, less investment/consumption (because x% of society would just take that sure bet of 3% returns.

Carter Jones
Carter Jones

Yes, because whats the alternative? Only buying absolute neccesities and no luxuries? Eventually the value of saving will balance with the value of spending (spending for attention, fun, shelter, food, etc).

Nathaniel Mitchell
Nathaniel Mitchell

Yes, that's what I was getting at. If at some point, consumers are so statisfied with their savings and future growth of that savings, that they will actually spend more (in purchasing power terms) later in life.

If so, a deflationary system could be seen as an investment. Lower consumption now for higher consumption later. But it wouldn't appear that way since prices and wages would go down, but purchasing power would go up. Pretty cool stuff.

Michael Lee
Michael Lee

When we reach that point, assuming we're even technologically capable of getting there before population growth overwhelms our current levels of production, the living will envy the dead.
en.m.wikipedia.org/wiki/Behavioral_sink

Ryan Nelson
Ryan Nelson

Wouldn't a deflationary currency like BTC be a better medium for exchange than the inflationary fiat dollar?
Sure however the system would be pretty immediately halted, or ham stringed in a major way by most governments. A lot of countries have a vested interest in seeing the US dollar retain its value, and BTC poses a lot of major problems to bankers, and tax collectors.

I've found a handy rule for if you should get involved with something is to ask yourself a simple question "Will the government have a reason to stop me before I make a large amount of money?" if the answer is yes, then its a bad idea.

Wyatt Gonzalez
Wyatt Gonzalez

Oh right I understand what you're saying better now, that there must be a level of savings that will compound and grow indefinitely so that its never drawn down, so you're free to spend what u want in the present day (because your future is taken care of). Kinda like the whole FIRE concept right?

You'd also have to consider how producers would react to it as well, they'd prefer to sell as much as possible now right (as prices down in next period, and so they could have the cash now to save to deflate/invest for later)?

Definitely very interesting stuff, just graduated from an economics degree and they didn't touch any of this stuff haha. Too unconventional & theoretical I guess.

interesting, but I wonder how much of that effect would be because the rats had experienced usual non-crowded life before the experiment. Humans historically have adapted very hard to changing circumstances and seeing as if the scenario we're talking about happened would be a gradual change maybe the effects wouldn't be as strong.

Ayden Wood
Ayden Wood

I think we're already in the midst of a behavioral sink we just have been ignoring it.
Those experiments started with just a few rats the rest were born inside them.

Adrian Thomas
Adrian Thomas

This has never been replicated.

Ayden Cox
Ayden Cox

Who tried to replicate it?

Brandon Edwards
Brandon Edwards

higher purchasing power in later periods.
You literally declare the saver is going to be introducing MORE wealth into the economy. Pay fucking attention holy shit.

Wyatt Clark
Wyatt Clark

BTC is a better medium for an economic system vs fiat by far.

Slowly people will come to the realization of this, and that the current economic system really only benefits the 0.1%

Aaron Long
Aaron Long

Inflation helps people invest in tangible goods rather than currency.

So for instance you have to buy an investment home, speculate on stock assets, or buy debt.

Without these mechanisms you could hold currency in a deflationary system for wealth gain.

Basically inflationary means you hold things that generate value. Deflationary means you hold currency. Comparing both systems you get less investment and velocity of economy in a deflationary system.

YOU SHOULD NOT EXPECT TO HOLD CURRENCY AND GAIN VALUE

you should be investing said currency into something that generates value

Owen Cruz
Owen Cruz

if its persistently deflationary like I said, I'll save today so I have more money tomorrow, and then when tomorrow comes I'll save because its worth more the day after, and so on.

Just because more 'wealth' is generated doesn't mean it contributes to the economy or economic growth. Pay attention :)

Leo Phillips
Leo Phillips

Like just because you have higher purchasing power doesn't mean you're incentivised to use it all. Its still better to buy what you need but to save as much as possible.

Asher Gomez
Asher Gomez

You should also not expect to hold currency and lose value. Currency should be a stable (and decentralized) means of exchange, i.e. a store of value. 'Fiat' currency is by and large a scam, because a small set of individuals are entirely in charge of its issuance (and are not democratically elected or representatives of the government). In practice, this is basically monetary oligarchy.

Nathaniel Howard
Nathaniel Howard

You should also not expect to hold currency and lose value.
t. bagholder (of cash of all things.) Get with the times grandpa.

Camden Thompson
Camden Thompson

At what point is the consumer content with their savings and spends more?

If I had 50k 10 years ago that can now purchase up to 500k of goods, I'd spend a good chunk of it. Still feeling confident that the savings would be sufficient in the future.

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