4 ms·

The simple answer is we are debasing our currency in a very complex way, that we cannot measure how much we debased it. In the past kings printed new coins to f

The simple answer is we are debasing our currency in a very complex way, that we cannot measure how much we debased it. In the past kings printed new coins to fund their wars or whatever and it was easier to track how much the currency lost value. In the present because economies have gotten complex + tools to debase have gotten complex we cannot estimate how much we have actually debased our currency by. If it’s 100% then there’s going to be a lot of inflationary pain, if it’s 10% we can probably handle it but I wouldn’t hold my breadth on getting any good estimate

SQueeeeeL 4y ago
>it was easier to track how much the currency lost value. I think this is a glamorization of the past. I'll bet most exchange throughout history was being done with some level of fraud baked into the system highly up the chain. Our modern fiscal institutions haven't even been cooking for 100 years and look at all the shit the weird sages in the crown city keep pulling with our green coinage.
dsfyu404ed 4y ago
>that we cannot measure how much we debased it. "it's a feature not a bug."
deleted 4y ago
[deleted]
arrosenberg 4y ago
You don't debase fiat currency, since there isn't a limited supply. Markets are distorted because of a poor distribution of money (too much where demand is low, too little where demand is high), because the Fed handed out money to the wealthy (who hoard it in the form of assets) and Congress refuses to tax it back and redistribute it to the working class who can't currently pay their rent.
- everforward 4y ago
  > You don't debase fiat currency, since there isn't a limited supply. That doesn't sound correct. There isn't a limited supply, but introducing more currency into circulation can reduce the value of it, which is a proper use of debasing. As a contrived example, if the treasury printed 100 trillion dollars and handed it out to everyone, I'm doubtful that bread would still be $1 a loaf.
  - arrosenberg 4y ago
    It doesn't reduce the value of the currency, it increases the supply of available money. This can drive additional demand and drive inflation that way. That's different than (e.g.) Roman-era debasement where they were using less valuable metals to mint coins and the value of the coin was based on the perceived metal content of the coin, rather than being fiat currency that follows supply and demand trends. If the currency was debased, inflation would have occurred fairly evenly across the economy, since the currency would be literally worth less. Instead we saw inflated prices chase sectors of the economy where there was either an over supply of money (e.g. PE buying up housing, driving up the price) or an undersupply of product (e.g. cheap eggs).
    - Rury 4y ago
      > If the currency was debased, inflation would have occurred fairly evenly across the economy Nothing makes this necessarily true. As an example, if the government printed everyone in the world 100 trillion dollars, and everyone used it to buy as much house they could, and nothing else, then houses would skyrocket in price as this money spurred demand for houses causing a shortage of housing stock (as prices are a matter of supply vs demand). Bread wouldn't change a dime in this scenario, because no one used the new money to buy more bread than normal, causing a supply shortage of bread. Ergo, nothing necessitates that inflation occurs evenly across the economy. Not even in Roman times. Inflation only occurs where demand happens. If demand, demands it be stored in bank accounts, then bank accounts inflate.
      - arrosenberg 4y ago
        Wrong. If you debase your currency, by definition the cost goes up on goods even where demand is static. That's what it literally means - coins are now worth half because they have half the silver they used to. We saw some inflation on food and gas prices in 2022 (for reason not directly related to monetary policy), but not in 2020 or 2021 when the cash was added to the economy - we saw inflation in assets because the Fed handed out cash to investors who deployed it on a limited pool of assets.

SQueeeeeL 4y ago

>it was easier to track how much the currency lost value. I think this is a glamorization of the past. I'll bet most exchange throughout history was being done with some level of fraud baked into the system highly up the chain. Our modern fiscal institutions haven't even been cooking for 100 years and look at all the shit the weird sages in the crown city keep pulling with our green coinage.

dsfyu404ed 4y ago

>that we cannot measure how much we debased it. "it's a feature not a bug."

deleted 4y ago

[deleted]

arrosenberg 4y ago

You don't debase fiat currency, since there isn't a limited supply. Markets are distorted because of a poor distribution of money (too much where demand is low, too little where demand is high), because the Fed handed out money to the wealthy (who hoard it in the form of assets) and Congress refuses to tax it back and redistribute it to the working class who can't currently pay their rent.

everforward 4y ago
> You don't debase fiat currency, since there isn't a limited supply. That doesn't sound correct. There isn't a limited supply, but introducing more currency into circulation can reduce the value of it, which is a proper use of debasing. As a contrived example, if the treasury printed 100 trillion dollars and handed it out to everyone, I'm doubtful that bread would still be $1 a loaf.
- arrosenberg 4y ago
  It doesn't reduce the value of the currency, it increases the supply of available money. This can drive additional demand and drive inflation that way. That's different than (e.g.) Roman-era debasement where they were using less valuable metals to mint coins and the value of the coin was based on the perceived metal content of the coin, rather than being fiat currency that follows supply and demand trends. If the currency was debased, inflation would have occurred fairly evenly across the economy, since the currency would be literally worth less. Instead we saw inflated prices chase sectors of the economy where there was either an over supply of money (e.g. PE buying up housing, driving up the price) or an undersupply of product (e.g. cheap eggs).
  - Rury 4y ago
    > If the currency was debased, inflation would have occurred fairly evenly across the economy Nothing makes this necessarily true. As an example, if the government printed everyone in the world 100 trillion dollars, and everyone used it to buy as much house they could, and nothing else, then houses would skyrocket in price as this money spurred demand for houses causing a shortage of housing stock (as prices are a matter of supply vs demand). Bread wouldn't change a dime in this scenario, because no one used the new money to buy more bread than normal, causing a supply shortage of bread. Ergo, nothing necessitates that inflation occurs evenly across the economy. Not even in Roman times. Inflation only occurs where demand happens. If demand, demands it be stored in bank accounts, then bank accounts inflate.
    - arrosenberg 4y ago
      Wrong. If you debase your currency, by definition the cost goes up on goods even where demand is static. That's what it literally means - coins are now worth half because they have half the silver they used to. We saw some inflation on food and gas prices in 2022 (for reason not directly related to monetary policy), but not in 2020 or 2021 when the cash was added to the economy - we saw inflation in assets because the Fed handed out cash to investors who deployed it on a limited pool of assets.