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by splintercell 2207 days ago
If you're going to be so specific about the meaning of the term investment than this is equivalent of saying that when you hide money under the mattress it is not outside the mattress.

His point was that when money is hidden under the mattress it is not serving an important function which would be if it wasn't under the mattress. I disagreed with that and explained how it worked.
1 comments
bildung 2207 days ago
I'm not trying to be pedantic, but saving and investments are two distinct activities with distinct economical outcomes. Fruitfully discussing economics on the internet is hard enough as is, deviating from standard meanings of core terms isn't exactly helpful.
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splintercell 2207 days ago
Yes and I understand, my point is that savings and investment aren't really qualitatively different activities. Savings are investment in money, and 'Investment' is investment in non-money goods.
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bildung 2207 days ago
But there is a qualitative difference! Storing excess capital into money is "saving". Using this saved capital to buy a car for private use, or videogames, is consumption. Using the money to produce more capital, like buying a machine for work, or even "buying" a degree at a university, is investment. The transformation of money into another store of value or physical thing is is not automatically investment, and the economic results are different.
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splintercell 2206 days ago
You can also check this thread: https://news.ycombinator.com/item?id=23452897

The fundamental idea is that if you store your money under the mattress then this is equivalent of investing in the most diversified index fund out there, you invest in EVERY business and CEO out there who operates in the USD economy.

This generally is a bad idea because the Federal Reserve produces more money which results in reduced returns, BUT, this effect is really visible in fixed money supply economies such as Bitcoin. By hodling bitcoin you invest in every bitcoin business out there (including the scams) because by not competing with other investors for the same resources, you allow them to operate at a bigger scale.

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