| HN Mirror

Deflationary currency is like a highway that you're allowed to park on. People will park their car on the highways and then charge you a fee to let you through.

>Said another way, I have a property worth X, but next year it will be worth more because money is deflationary.

Uhm, if money is deflationary, your house will be worth less than X denominated in the deflationary currency. This means if the money grows in value faster you'd sell all your assets as quickly as possible and replace it with a useless scrap of paper.

>Why would I want to sell my house this year when I can wait until next year to sell my house and get more money.

Again, if money is deflationary, you'd hold onto money and wait for house prices to drop with the aforementioned mechanic.

You might say this is appealing, but the problem is that your income depends on other people's spending and they have the same incentive as you do, which is to earn more than you spend. That's something that is not possible in aggregate, where total aggregate spending and total aggregate income must always be equal. This is a zero sum game purely mathematically and this is not a moral judgement but an explanation how the rules work.

When people follow the rules of the game, something weird happens. The promised outcome of a wealthy society from everyone being prudent savers doesn't emerge. The reason is as follows: If you have 1 million paper notes that represent the wealth of the entire nation and the value of the paper notes goes up, the represented wealth of the entire nation goes up, but the nation still has the same 1 million paper notes. No matter how much value people try to save in the form of money, they will still only have paper notes.

Those paper notes do not have intrinsic value and that is for a good reason. Giving the paper notes intrinsic value doesn't change the fundamentals, it just makes the tokens more expensive to produce. It's like having a golden toilet.

If money is worthless, then trying to give it non-transient value is a fools errand. Trying to say that a house is equally as valuable as a small bundle of cotton fabric is only acceptable for the purposes of accounting, but saying that the same bundle of cotton fabric (whose value is decreed) ought to buy more house next year is batshit insane. You couldn't come up with a better system to reward laziness and idleness.