Inflation is good, actually - You'll cowards don't even print money

hundredpercent

hundredpercent

True & Honest Fan
kiwifarms.net
Joined
Jun 9, 2020
In all Western economies, precisely two things are true:
1) Asset prices are too high. If people are spending all their money to pay rents to a tiny ownership class, this causes immense long-term economic and social problems, as seen in South America. Thus, asset prices have to go down.
2) If asset prices go down, the economy crashes, since people's (boomers') wealth is tied up in these assets, and the banks also have a stake in it through the mortgage market. If asset prices go down (or even stop going up), the boomers will have much less money to spend, which hurts the economy. Thus, asset prices have to go up.

This is a bit of a paradox. Asset prices have to go up and down at the same time, or otherwise the economy will crash. How do our central planners square this circle?

I think the answer to that question is inflation. Let's say we have 10-15% inflation - extremely high by modern standards, but about what we had in the 1940s and 1970s. Then what?

  • Asset prices (i.e. property, stock market), can continue to go up by a stable 5-10% a year, meaning people will not lose money, and their debt will not overtake them
  • Asset prices (i.e. property, stock market), can go down in real terms (e.g. 5% growth at 15% inflation means it "actually" gets 10% cheaper), meaning people will be able to afford them
  • Also, debt would go away (owing someone $2k is less of a problem if that's only worth like $500)

Now, it would require a leap of faith to suggest our central planners are competent enough to pull this off successfully. But I don't see any obvious downsides to large inflation. Heck, even hyperinflation seems fine. Inflation is the only way to make everyone happy, such that boomers do not see notional value losses while millennials still have a decent purchasing power.

Can anyone of you faggots explain what's so bad about inflation, why I should worry about it, and why it shouldn't go to a sensible 10-20-30%?
 
  • Dislike
  • Informative
Reactions: IAmNotAlpharius, (deleted member), (deleted member) and 2 others
Blasterisk said:
Yeah, but, like, dude, what if we just gave everybody a million dollars? Then you could, like, buy a house and smoke as much weed as you wanted. Duuuuuuude.
Click to expand...
If you just printed money and gave it to everyone, the dollar would go to zero, then what? This would also mean everyone would be free from debt. People who owned real assets that had intrinsic value would be unaffected.
 
  • Dislike
  • Like
  • Informative
Reactions: IAmNotAlpharius, Gone Ham, Blasterisk and 3 others
hundredpercent said:
If you just printed money and gave it to everyone, the dollar would go to zero, then what? This would also mean everyone would be free from debt. People who owned real assets that had intrinsic value would be unaffected.
Click to expand...
Take Micro and Macroeconomics 101 then come back and report your findings. You are obviously completely economically illiterate at this point so hopefully you even possess the ability to learn.
 
  • Agree
  • Feels
  • Like
Reactions: Digi Faggot, Seventh Star, Eydallur and 4 others
Walrus and Carpenter said:
Take Micro and Macroeconomics 101 then come back and report your findings. You are obviously completely economically illiterate at this point so hopefully you even possess the ability to learn.
Click to expand...
no u

I understand what inflation is and what it does. I just can't see what's so bad about it. It hurts people with large holdings of dollar assets, yes? In favor of those who work, yes? How is this a bad thing?
 
  • Informative
Reactions: IAmNotAlpharius
Isn't some of it going to be a natural side effect of technological advancement? Doesn't it make some sense that a computer today would cost more than one in the past considering one today is a lot more advanced?

You also of course get more bang for your buck with a computer today, so it kind of evens out.
 
Can’t the US government just eliminate dollars in circulation?
It‘s a matter of deleting numbers, not actual papers.
 
Not to defend printing a gorrilion dollars, but I do think a small amount of inflation is good. You don't want people to be incentivized to just hold onto money. You want them investing or consuming, doing something productive with it
 
  • Informative
  • Agree
Reactions: IAmNotAlpharius and hundredpercent
sponge.gif

Let me pay for my bread.
 
In practice, no.

1. Labour union contracts and other factors mean that wages are nominally flat. Sure, people lose their debt, but lots more people lose their livelihoods. This is actually why (small) inflation is generally good, as workers are devalued. Also its the largely rich who invest in land, gold, and other non-liquid assets, so no prole revolution for you.

2. Banks aren't blind to inflation. They'll adjust new loans/mortgages to predicted inflation rate. Obviously with a 10% higher interest, for inflation that isn't guaranteed to happen (probably won't), nobody's willing to buy stuff and the market crashes anyway.

also the 1940s inflation was helped by the nation-wide war effort increasing money velocity, a part of inflation, and the 1970s inflation was due to oil prices going up which obviously hampers activity
 
  • Like
Reactions: IAmNotAlpharius
You must log in or register to reply here.
Back