[vel0city]

Holding on to currency or shiny objects is just another form of speculation. Maybe the bank fails. Maybe your house burns down and melts the contents of your safe. Maybe you're robbed. Maybe trade wars massively reduce your purchasing power. Maybe a new source of the shiny objects gets found and it's not are rare as you think. Maybe less people care about that shiny object in the future. Maybe that gold certificate was really just a fraud.

Your argument isn't really related to whether we should incentivize people to bury paper in their backyard or if they should hold bonds or other investments. The answer to your problem is to have better social safety nets.

[bsdpufferfish]

Of course there is always risk. But one of the supposed goals of fiat money and property rights is to reduce that risk, ensuring the ability to save into the future.

There are countless examples of countries where that trust was broken.

[vel0city]

Your argument of governments are supposed to protect property rights still applies for bonds and stocks and other investments, so once again still not exactly an argument for incentivizing speculation on pieces of paper or shiny objects instead of productive assets.

The point of fiat isn't to give returns to those who worked hard by burying paper in their backyard, the point of fiat is to be an easy medium of exchange which does involve a certain level of value stability. A currency having a slow, predictable rate of inflation can still be considered having a certain level of stability, at least when concerning being a useful medium of exchange. I know that a loaf of bread isn't going to be $50 or $0.05 tomorrow, it'll likely be roughly the same as today. Over a long time scale sure that loaf will probably be more than today, but I'll be buying that bread in 2044 dollars not 2024 dollars, because in the end I shouldn't be incentivized to hold dollars.

And once again the only way to address "it's not good for society that ordinary people have to speculate" is by having strong social safety nets. Hoarding paper or shiny objects is still speculation with risks, as you just agreed.

[bsdpufferfish]

> property rights

No you are conflating two topics. Property rights is not propping up stocks and bonds. It's protecting ownership so you can invest in building things over the long term without them being taken.

Similar reasons encourage the government to protect the value of their currency.

> the point of fiat is to be an easy medium of exchange

The stated goal of the federal reserve is price stability, not exchange.

> Hoarding paper or shiny objects is still speculation with risk

Yep but it's a difference of how much risk.

> having strong social safety nets

Those carry their own kinds of risk.

> I shouldn't be incentivized to hold dollars.

0% is hardly a massive incentive to hold cash. If we can't agree on that then ill be incentivized to hold a currency that does care about its value.

[vel0city]

> Property rights is not propping up stocks and bonds.

I'm not talking about propping up stocks and bonds, I'm talking about ensuring fair, open markets for such things. I'm entirely talking about "protecting ownership so you can invest in building things over the long term without them being taken." That same concept of the government protecting your ownership of some shiny objects applies to protecting shareholders from a company publishing fraudulent financial statements, or selling bonds that are actually objectively worthless with actual review, or shenanigans that effectively remove such ownership aspects.

> 0% is hardly a massive incentive to hold cash.

Negative rate bonds are (or at least were) a thing as well. If it costs more to put your shiny objects and fancy paper in a safe and protect it than having an account at a bank then there's incentive on it even if there are costs. And sure, even with inflation there's still some incentive to hold some amount of dollars. Liquidity has value after all. Even though I'm OK with some slight inflation on dollars I still tend to hold some amount of them. After all, I didn't buy lunch with stocks!

And even then, it is not about 0% being an incentive to hold, it is about not having an incentive to invest. As I already stated, IMO its worse for society overall to encourage people to hoard fancy paper and shiny objects compared to actually investing it. But hey maybe you'd prefer for people to not invest in bonds and what not and instead just have piles of fancy paper and shiny objects instead of roads and infrastructure and more productive enterprises. I'm sure that'll work out well for them.