Hacker News new | ask | show | jobs
by littlestymaar 232 days ago
Pet peeve: Contrary to a persistent popular belief, inflation != currency debasement.

(You can have inflation while your currency go up relatively to all the others on the FX market, like what happened to USD in 2022-S1, or you can have massive inflation difference between countries sharing the same currency, like it happened in the Euro Area between 2022 and today).
1 comments
gruez 232 days ago
>Pet peeve: Contrary to a persistent popular belief, inflation != currency debasement.

Not to mention that "debasement" doesn't make sense anymore given that there basically aren't any currencies on the gold standard anymore. At best you could call a pegged currency that was devalued as being debased (with the base being the pegged currency), but that doesn't apply to USD. "debasement" therefore is just a pejorative way saying "inflation" or "monetary expansion".

link
littlestymaar 232 days ago
I think it's fair to keep using debasement for the act of letting your currency go down against other currencies on the FX market.

> "inflation" or "monetary expansion".

This is my second pet peeve on the topic, inflation and growth of the money supply are independent phenomenons. (they are only correlated in countries with high inflation regimes and, hyperinflation aside, the causation is essentially reversed: the money supply grow because of the inflation, higher price leading to an increase of loans).

link
binarycrusader 232 days ago
It might be subjective, but doesn't this count at least partially as a currency on the gold standard?

https://en.wikipedia.org/wiki/Zimbabwean_ZiG

link
gruez 232 days ago
From wikipedia:

>A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold.

and

>The Zimbabwe Gold (ZiG; code: ZWG)[3] is the official currency of Zimbabwe since 8 April 2024,[2] backed by US$900 million worth of hard assets: foreign currencies, gold, and other precious metals.

>...

>Although the rate of devaluation of the ZiG may vary,[13] the ZiG has consistently lost value since its introduction, and its long-term prospects are dim so long as large grain imports continue and the government continues to overspend.

sounds like it's not "fixed" at all, and "backed by ... hard assets" just means it has central bank reserves, which most fiat currencies have.

link
binarycrusader 230 days ago
right, which is why I said partially...
link