[authatheist]

You have no idea what you're talking about.

Inflation is a tax on savings, but that's alright because money has no value?! But if money actually had no value, there would be no use for it.

Consumption "has to" match production?! What's that supppsed to mean? If I produce something no one wants, people "have to" consume it anyway?

You say inflation is good because it motivates people to invest (because their money loses value just sitting in a bank), but why wouldn't people want to invest even if their money was gaining in value? The purchasing power of whatever money you earn through investments is increased by deflation too, so the sooner you make a good investment, the better off you'll be.

[seanmcdirmid]

Money has no intrinsic value, it only has value based on trust that the money We receive can be used to purchase other goods. The value of money is set by the markets (and indirectly by prices, wages, and printing new bills).

If you produce and no one buys, then you stop producing because you are providing no value; simple. If your production is non perishable, you could pay rent and upkeep to stockpile it, but value is lost regardless.

People have an incentive not to invest because investing is risky. Many would just sit on a gold hoard than to risk losing it, but that behavior doesn't solve any consumption problems (worse, it leads to temporary deflation, since that gold is taken out of circulation).

This isn't rocket sicence, most of us have college degrees, this is just Econ 101.

[marcosdumay]

You've just said that everything produced must be consumed. Now you have a more realistic model, with stocks. You are still missing waste. Keep improving it, and you may come into something useful.

You seem to have misunderstood you Econ 101 classes because "supply" isn't the same thing as "production", "demand" isn't equivalent to "consumption", and "intrinsic value" is a completely artificial construct.

Also, people save mostly because they want to spend later, invest mostly because they want to have more money, and consume mostly because they want the wealth. Inflation and deflation have very complex and often non-intuitive relations with those three. You can't just extrapolate from Econ 101, not even after you understand it right.

[seanmcdirmid]

I didn't confuse production and consumption with supply and demand, which anyways determines costs and is not the point. We simply have little capacity to save production like we can save water in a reservoir. People save because they want to spend later, sure, but again, that is irrelevant, because production can't be saved in general someone else must borrow.

Investments require taking on risk and...they actually require skills to do right (e.g. Doing your homework). So you might want to invest to get rich, but you might not want to invest because you aren't good at it or do t want to become poor. It still has to be incentivized, especially when most people just want comfortable lives.

You seem to have an agenda in introducing more relationshios above this one simple fact. So make your point rather than just claiming my ignorance, because no points were argued in your post.

[authatheist]

> production can't be saved in general someone else must borrow

What's that supposed to mean?

[authatheist]

You're not addressing my post, where I tried to highlight the silliness of your earlier claims.

How does consumption "have to" match production? How do you figure "money has no value"? Now you're talking about "intrinsic value" but earlier it was just plain "value".

People save money for a reason you know. If money has no value, as you originally claimed, then there's no reason to save or possess it. If money has no "intrinsic value" that doesn't make your original claim any less confused.

But to be precise, value is purely subjective. We've been using the word somewhat ambiguously. Value is utility as a means towards an end. Money, as a medium of exchange, has utility as a means towards countless ends, and that's exactly why everyone wants it.

You say people have a disincentive to invest because it's risky, but I don't see a point there. It all depends on the investment opportunity, and the investor's tolerance to risk etc, ie. the circumstances. Some people do invest, some don't. So what?

You say that not investing doesn't "solve any consumption problems", but what the hell might those be? Again, why does consumption "have to" match production? What does that mean? What's a "consumption problem" and whose problem is it, and why?

Why is (price-)deflation a problem, considering it means our purchasing power is increasing? Do you really want to claim people want less stuff for their money?

Don't pretend you're giving me an economics lesson.

[icelancer]

How is investing NOT risky if inflation occurs? All you are doing is pressuring people into investing (aka gambling, because there is no guaranteed ROI) and causing a fluctuation of returns amongst people who "invest."

Some of us actually have advanced degrees in Economics, so let's not act like you're Krugman himself.

[Dylan16807]

>If I produce something no one wants, people "have to" consume it anyway?

You go out of business and stop producing.

[authatheist]

I know that, but the OP didn't seem to. He claimed consumption "has to" match production.

[Dylan16807]

It does, in the same way that effects have to match causes. The only time production can run free with "no consumption" is when someone personally bankrolls extra production, and in that case they're actually the consumer.

[authatheist]

So you're telling me that if I produce a bunch of shit-sandwiches and no one wants them, for whatever mysterious reason, then if I produce some more anyway, suddenly I'm the sole consumer of said sandwiches?

How does that make sense, considering no one has even eaten (=consumed) one?

[Dylan16807]

If you're making them while knowing you won't sell them, you're not actually putting them on the market. You're making them for yourself. So either the production should be completely ignored when talking about producer/consumer, or you're the real consumer here. You don't have to eat them, you're a collector.

But that's just closing a minor loophole. People do not often intentionally produce market products with no intent to sell, and it'll make them run out of money. The overall rule is pretty solid even if you don't close the minor loophole.

[Dylan16807]

>or something compels producers to refrain from production that would go unconsumed

Yeah, they run out of money. The rest is a rounding error.

>I could be on a sacred mission to provide everyone in the world with a shit-sandwich

You're not a producer in the market sense then. Consumption is a market term, it doesn't mean anyone has to eat the sandwich.

To put it simply: The original statement was "consumption has to match production with very few exceptions". Zealotry outside of markets is one of those few exceptions; it's very rare. Otherwise market forces compel them to match.