[craigc]

Thanks. I am well aware of all the things you pointed out. I think we just have a different opinion of what stable is or should be.

I think a currency that has $1.00 worth of purchasing power when I am given it should not lose 99% of its value over the next 100 years if I do not spend it. I am aware that that is impossible due to inflation, and that is why things like gold are much better stores of value than the dollar.

[ummonk]

A good currency is focused on being a good medium of exchange, not a good store of value.

[api]

This is really the fundamental disagreement: what is money? Is it a store of value or a medium of exchange?

Until or unless agreement is reached on that, debating other points is kind of a waste of time. You're not going to agree if you disagree on the fundamental goal of money.

I've personally gone over to the Keynesian/Monetarist side. IMHO the most important idea of Keynes by far is monetary velocity: that wealth is a verb, not a noun. To be wealthy is to have much activity. The desire for idle stores of wealth reflects a very deep and very ancient wish for a stability that does not exist in this world. In this world things are either alive, moving, and changing, or dead.

Austrians want "hard money" that can act as an inert store of value for the same reason the Egyptians elaborately mummified their dead and piled vast stores of wealth in tombs. It's a very ancient and unfortunately very misguided quest for immortality through stopping of avoiding time. It doesn't work. The mummies were just corpses, the tombs were raided, and with enough time the pyramids will be dust.

If there is ever any kind of immortality to be had, it will be by embracing change and using science and technology to modify our biology or even transfer consciousness and intelligence itself into another medium ("mind uploading"). Those kinds of sci-fi things would require immense technological progress, and that's far more likely to occur in a world of dynamic economic systems biased toward investment rather than stuffing money into mattresses.

[craigc]

Thank you. I think you are right. I think it’s impossible to reach any sort of consensus when two groups have fundamentally different views.

I’m going to just try to stay out of it from now on. Not worth the time or energy. Especially when my view is the minority view.

FWIW I don’t believe it is any sort of quest towards immortality. My biggest problem is how Keynesian economics tends to favor the central banks who are able to create money out of nothing.

[api]

As I said I'm more on the Keynesian/Monetarist side, but you do have a valid point about how new money is introduced. Current central banks introduce new money in ways that disproportionately benefit banks, the rich, and of course the state. This is not surprising since banks, the rich, and the state chartered the central banks.

This is a separate point from the "what should money be?" debate.

There are other potential ways of introducing new money, especially in the digital age. I'm a fan of a smart version of the "money from helicopters" idea-- introduce money across the entire economy rather than just to the state (via bond purchases) or banks (via fed lending-to-lend).

[craigc]

That’s an interesting idea. How could you see that working in practice?

[api]

With a basic income you could make it variable and raise or lower the nominal basic income payment to vary the rate of money supply growth. This could run alongside the regular interest rate system. If inflation got too high you could raise the interest rate to vacuum up excess currency.

[Nursie]

Are you planning to hold on to that dollar for a hundred years? Do you think you'll be alive then? Do you not think that perhaps if you want it to maintain or grow its value you should put it to work, rather than just sitting on it? Why should society value whatever it is you did to earn a buck today the same in 100 years?

[craigc]

I understand that that is the driving force behind Keynesian economics, and I think you have a valid point.

That said, when you consider the way inflation actually works most of the new money pumped into the system disproportionately benefits big businesses and banks at the expense of the rest of the population. It is essentially a hidden tax on the rest of us.

Central banks pumping more money into the economy actually helps them because it equates to more interest payments they can collect and puts more people and governments in their debt. Also they don’t have to do any work to create the money so could you explain how that is considered a fair system?

Some elite bankers are able to just summon new money out of thin air to serve their interests but money that I worked hard to earn is going to lose its value if I hold onto it for too long?

Why do you think there is such a huge gap in income inequality that began as soon as we broke off completely from the gold standard in 1971?