[rapsey]

So you will never spend it. What gives currencies relative stability is central banks.

It will never become a global reserve currency for the same reason gold is no longer a basis for money. It is better to inflate your way out of problems (print money to bail out key institutions) than to deflate your way out of them (great depression). Better is defined as causing less harm to individuals.

[dnautics]

> Better is defined as causing less harm to individuals

Inflation sucks for more people than deflation. It causes social strife, environmental destruction through overconsumption, a widening gap between the rich and the poor, more expensive healthcare for lower classes, stress and the need to live on the corporate treadmill, a general inability to identify worthwhile investments versus ponzi schemes because TINA, pushing more people into partial servitude to the economic system by encouraging borrowing.

It's great for the rich, though. Lowered interest rates things like financial games, leveraged trading, and corporate agglomeration become favored. And the devaluing currency pushes average joes to participate in the wall street casino, which is good for CEOs.

It's not the deflation of the great depression that was causing starvation. Remember that during the part of the great depression where people were starving (nobody was starving at the onset), the government was doing things like buying food and burying it on the premise that this would create demand and stimulate prices.

[gajotron]

You're confusing the economic effects of inflation and deflation with environments of low and high real interest rates.

I'd counter by saying that the strongest decades of median real wage growth and general GDP growth were during the high inflation 1960s and 1970s.

I'd argue that the fact nobody was starving at the beginning of the great depression means that the economic mess didn't cause the starvation is a bit of a straw man. Of course, at the beginning, people don't immediately find themselves in destitution, they draw down savings. The destitution begins when the economic disruption becomes prolonged.

I can't find any primary sources on the government policy of destroying food, but I'd conjecture the reason it was done (if it happened) was to support nominal food prices and therefore the apparent credit-worthiness of farms in a highly deflationary environment. Of course, the real problem was that there was insufficient aggregate demand to support the nominal food price, i.e. deflation combined with wage-price downward stickiness caused the market to fail to clear.

[dnautics]

> You're confusing the economic effects of inflation and deflation with environments of low and high real interest rates.

No I'm not. The one is the primary mechanism that is being used to create the other.

> Of course, the real problem...

The real problem was policymakers believing dumb shit, if we're being charitable, confusing correlation for causation.

https://www.youtube.com/watch?v=QsAnssN1cxM

[dnautics]

> the strongest decades of median real wage growth and general GDP growth were during the high inflation 1960s and 1970s.

How about 1860-1900. A deflationary era when median wealth increased ( even without taking into account that a chunk of the population was liberated from chattel slavery) and the us went from failed state to international colonial expansionist superpower

[nathias]

Inflation is a form of tax, or rather a corporate handout, it transfers value from the poor to the rich. I have no problem taking on the risk of volatility to help destroy it. It can also be mitigated with implementation of different monetary policies, inflation is not the only mechanism that can be used.

[rawtxapp]

I'm not sure that it's "better", we now have crazy high asset prices, the bubble is bigger than ever, all while the average worker's compensation has stayed relatively stable.

[pfisch]

Gold still makes up a percentage of global reserves for all major countries.